Emilia-Romagna economy grew moderately in 2025, faces 2026 risks

Emilia-Romagna's economic activity grew moderately by 0.5 percent in 2025, mirroring national trends, according to the Banca d'Italia's regional economic indicator (ITER).

This growth was primarily fueled by business and public investments, supported by fiscal incentives and the National Recovery and Resilience Plan (PNRR).

However, the economic outlook for early 2026 has deteriorated due to escalating geopolitical tensions, particularly the Middle East crisis and disruptions in the Strait of Hormuz.

These factors are causing supply difficulties and strong upward pressure on energy prices, posing significant downside risks to future growth.

Business performance in 2025 was mixed; industrial turnover and value added largely stagnated, and real exports remained stable.

Nevertheless, industrial production saw a recovery in the final quarter, notably in mechanics and metallurgy, with the construction sector also increasing activity, boosted by public works.

Emilia-Romagna's automotive sector significantly influences its economic dynamics, ranking as Italy's second most specialized large region.

Its supply chain has shown greater resilience to technological and regulatory shocks since the pandemic, partly due to strong international brand connections.

Firms in this sector, primarily in componentry and metal products, exhibit higher revenues and productivity.

In 2025, regional employment increased significantly, surpassing the national average, driven by growth in construction and services.

This rise was notable among female workers, the self-employed, and older age groups.

Despite real wage declines from 2008-2023, household purchasing power moderately grew in 2025, supported by favorable employment and contained inflation.

Loans to the private non-financial sector also returned to growth, particularly mortgages, and credit quality improved, with new non-performing loans decreasing for both businesses and households.