Piedmont economy sees modest growth, faces automotive headwinds

Piedmont's economy experienced modest growth in 2025, with its gross domestic product increasing by 0.4 percent, a deceleration from the prior year.

This performance aligns with broader trends across Northern Italy and the national average.

The Banca d'Italia's quarterly regional economic indicator (ITER) showed a partial recovery late in 2025 and early 2026, but deteriorated again in March due to global macroeconomic shifts and supply chain issues stemming from the Persian Gulf conflict.

Industrial production saw a slight rebound, yet remained below 2021-2024 levels, with the automotive sector notably contributing to this weakness.

Conversely, the aerospace sector, a significant contributor to regional value added, demonstrated strong innovation.

Investments by industrial firms increased, though less than anticipated, reflecting a cautious approach amid moderate profitability and high uncertainty.

Bank loans stabilized overall but declined in industry, construction, and for smaller businesses, while bond financing intensified for larger service companies.

The labor market in Piedmont saw a slowdown in employment growth during 2025, with a decline in industrial sector jobs and increased reliance on wage support schemes.

This led to a rise in the unemployment rate, reaching the national average.

Nominal wages, as defined by national collective agreements, grew in line with the Italian average but at a slower pace than the previous year.

Persistent wage gaps by gender, age, and citizenship were noted, influenced by sectoral employment distribution and the prevalence of part-time or less stable jobs among women, youth, and foreign workers.

Household income and consumption growth remained modest in real terms.

While car purchases weakened, home sales accelerated, supported by an increase in mortgages despite slightly higher interest rates.

Household debt-to-income ratios remained stable and below national and Northern Italian averages, with overall high repayment capacity, though consumer credit payment delays slightly increased.