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Recent productivity trends and transformations in Italy's production system

Author

Listed:
  • Antonio Accetturo

    (Bank of Italy)

  • Audinga Baltrunaite

    (Bank of Italy)

  • Emanuele Ciani

    (Bank of Italy)

  • Federico Cingano

    (Bank of Italy)

  • Federica Daniele

    (Bank of Italy)

  • Roberta De Luca

    (Bank of Italy)

  • Irene Di Marzio

    (Bank of Italy)

  • Rosalia Greco

    (Bank of Italy)

  • Andrea Linarello

    (Bank of Italy)

  • Francesco Manaresi

    (Bank of Italy)

  • Sauro Mocetti

    (Bank of Italy)

Abstract

Between 2019 and 2024, the Italian economy recorded GDP growth that exceeded both the euro-area average and that of the previous five-year period. The expansion was mainly driven by the private sector, where value added increased by nearly 10 per cent, largely benefiting from a generous fiscal stimulus. Growth was concentrated in construction and services, while manufacturing slowed. It was fuelled by rising employment, while labour productivity declined over the past two years. The productive system saw an increase in the average firm size (which remains below the euro-area average), as well as in profitability and investment propensity. Firm-level productivity was supported by reallocation and internal growth processes, by multinational companies, and by the dynamism of firms at the productivity frontier. However, the gap between the most efficient firms and the rest of the productive system widened. To close the productivity gap with major European countries – and in light of recent signs of weakening – the production system will need to be strengthened more broadly, and fostering a wider adoption of advanced technologies will be crucial.

Suggested Citation

  • Antonio Accetturo & Audinga Baltrunaite & Emanuele Ciani & Federico Cingano & Federica Daniele & Roberta De Luca & Irene Di Marzio & Rosalia Greco & Andrea Linarello & Francesco Manaresi & Sauro Mocet, 2025. "Recent productivity trends and transformations in Italy's production system," Questioni di Economia e Finanza (Occasional Papers) 953, Bank of Italy, Economic Research and International Relations Area.
  • Handle: RePEc:bdi:opques:qef_953_25
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    File URL: https://www.bancaditalia.it/pubblicazioni/qef/2025-0953/QEF_953_25.pdf
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    Keywords

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    JEL classification:

    • D20 - Microeconomics - - Production and Organizations - - - General
    • L20 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - General
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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