The 2016 Report from the Italian Association of Contractors shows that international construction projects are a big portion of their revenues. The Report highlights also that this is a trend which involves not only the big companies but also the SME companies.
The analysis of the domestic and international revenues has been conducted on 38 Italian companies (with turnover between €50 Million and above €500 Million) and clearly shows an increase in international construction projects and at the same time a decrease of the revenues generated domestically.
According to the Report the decrease of revenues in the domestic market is mainly attributable to the persistent crisis of the Italian market and to the decrease of financial resources for infrastructural works in Italy.
On the other side, the increase of turnover generated via international construction projects proves the capacity of the Italian contractors to work abroad and to improve the level of their internationalisation process notwithstanding the political and economical instability of certain areas.
The Italian construction SME still encounters certain difficulties in working abroad and this is shown in the table below. Italian construction SME with total turnover below €100 Million generate abroad a percentage between 27% and 44% of their total turnover.
In terms of areas where Italian contractors are more active:
- South America is the first region where Italian contractors are active with turnover at around 23%;
- Middle East represents approximately 20.4% of the international construction projects; and
- Sub-Saharian Africa approximately 10%.
The data are certainly encouraging and show the capabilities of the Italian contractors to work abroad.
The Report, however, does not focus on the issues and problems that the Italian contractors face (especially when they are SME) working in foreign countries.
While the big companies are certainly more structured to tackle the issues of international foreign projects, the SME have to settle different and rather burdensome issues.
Despite there are well-known cases of big companies involved in multi-billionaire disputes for international projects, the SME are certainly much more exposed to risks of disputes and controversies with foreign employers.
To download an abstract of the full 2016 Report click here
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