GUIDONIA, Italy — Emanuele Tedeschi wiped sawdust from his hands and gestured around the cavernous woodworking factory that has been in his family for two generations. The big machines, which used to run overtime carving custom furnishings for private homes, Roman palazzi and even the Vatican, sat idle on a shop floor nearly devoid of workers.

'‘A year and a half ago, the noise from production was so loud that you had to shout to be heard,’' said Mr. Tedeschi, walking amid pallets of cherry and other fine woods stacked up and waiting for a purpose.

Since a government austerity plan designed to shield Italy from Europe’s debt crisis took hold last year, the economy has tumbled into one of worst recessions of any euro zone country, and Mr. Tedeschi’s orders have all but dried up. His company, Temeca, is still in business. For now.

But among Italy’s estimated six million companies, businesses of all sizes have been going belly up at the rate of 1,000 a day over the last year, especially among the small and midsize companies that represent the backbone of Italy’s 1.5 trillion euro, or $2 trillion, economy.