Lombardy economy grows 0.7 percent in 2025

In 2025, Lombardy's economy continued its growth trajectory, with a 0.7 percent increase in output, marginally surpassing the national average.

Consumer prices saw a moderate rise of 1.3 percent.

The manufacturing sector returned to expansion, and exports increased, particularly to European Union countries, though overall less than potential demand.

Business investment also grew, albeit modestly.

The construction sector experienced continued expansion, bolstered by projects funded by the National Recovery and Resilience Plan (PNRR) and investments related to the Milan Cortina 2026 Winter Olympics.

The digitalization trend fueled demand for business services, while strong international tourism supported accommodation and catering activities.

The real estate market also recovered, with increased transactions and accelerating residential property prices.

This productive growth translated into higher corporate profits, enabling internal financing of investments, maintaining high liquidity, and increasing financial asset acquisitions.

Larger, more solid companies increased their bank borrowing, yet indicators of banking credit risk remained historically low.

The labor market remained favorable, with continued employment growth and a decrease in the unemployment rate.

Household incomes and consumption saw slight increases, with per capita disposable income in Lombardy exceeding the national average, though economic hardship and consumption disparities mirrored other regions.

Household debt expanded across both consumer credit and mortgage components, with new mortgage rates stabilizing after an initial decline.

Public territorial entity investments also rose, supported by the PNRR, focusing on healthcare infrastructure and school building requalification.

The initial months of 2026 saw economic activity remain largely stable, despite a significant surge in uncertainty stemming from the conflict involving the United States, Israel, and Iran.

Industrial production continued its upward trend in the first quarter, and the services sector maintained positive growth, partly due to tourism flows associated with the Milan Cortina 2026 Winter Olympics.

Investments by territorial public entities also continued to expand.

However, the short-term economic outlook is heavily influenced by the ongoing geopolitical tensions.

A prolonged disruption to navigation in the Strait of Hormuz poses considerable risks to the global supply of natural gas, oil, and other essential raw materials.

The sharp increase in energy prices has already begun to affect consumer prices, leading to a deterioration in household confidence.

Surveys conducted by the Banca d'Italia indicate that businesses anticipate a decline in demand for 2026 and are scaling back their investment plans.

Two-thirds of the surveyed companies consider geopolitical risk a significant factor in shaping their strategic expansion decisions.

In the medium term, businesses face a complex environment marked by international geopolitical tensions, rapid technological transformations, demographic shifts, and climate-related risks.

Economic sustainability increasingly depends on their capacity to innovate processes and products and to enhance the value of labor.

Lombardy's economy is actively addressing these innovation challenges, with approximately half of industrial and service firms having invested in advanced digital technologies.

The adoption of artificial intelligence is also growing, though often limited to specific applications rather than widespread integration into production processes.