Montenegro’s construction sector recorded moderate growth in completed works during the first quarter of 2026, while the value of new building contracts increased significantly, indicating continued activity in residential, tourism and commercial development. The value of completed construction works reached €164.8 million in the first quarter of 2026, compared with €156.8 million in the same period of 2025, representing a nominal increase of approximately 5.1 per cent.
New building contracts nearly double
The strongest movement was recorded in new contracts for buildings. The value of new building contracts increased from €13.2 million in the first quarter of 2025 to €25.8 million in the first quarter of 2026, representing almost double the previous level. At the same time, contracts for other structures declined from €22.2 million to €20.4 million.
Total new construction contracts reached approximately €46.3 million, an increase of almost 31 per cent year on year. The higher share of building contracts indicates stronger momentum in residential, hotel and commercial projects compared with infrastructure-related works at the beginning of 2026.
Construction employment continues to expand
Employment growth remained one of the strongest indicators of sector activity. Average construction employment increased 11.6 per cent during the first half of 2026, rising from 21,632 workers to 24,150 workers.
The sector employed 24,678 people in June, confirming construction as one of Montenegro’s fastest-growing employment areas. Effective working hours increased only slightly, from 4.39 million to 4.42 million hours, representing growth of 0.7 per cent. The difference between the increase in completed construction value and working hours may reflect higher project prices, a greater share of higher-value developments or improvements in measured productivity.
Construction growth faces operational constraints
Despite continued activity, the sector continues to face challenges related to skilled labour shortages, dependence on foreign workers, imported construction materials, municipal infrastructure capacity and lengthy permitting procedures. Coastal construction projects are also affected by seasonal limitations, congestion pressures and environmental requirements.
Financing remains key for project delivery
Financing conditions remain an important factor for new developments. Residential projects supported by foreign buyers and advance sales operate under different risk conditions compared with hotels or infrastructure projects that require longer-term financing. Banks assess factors including property ownership status, planning documentation, construction permits, contractor capacity, cost reserves and projected sales reliability when evaluating construction projects.
Infrastructure capacity affects long-term development
Although new contract values increased, the overall pipeline remains relatively limited and may be concentrated among a smaller number of projects. The decline in contracts for other structures indicates that infrastructure development did not expand at the same pace as private-sector building activity.
The availability of supporting infrastructure, including roads, electricity networks, water supply, wastewater treatment systems and public services, remains an important factor for future construction activity. New buildings can be completed faster than municipal infrastructure upgrades, creating additional pressure on local systems. Montenegro’s construction sector remained active in early 2026, with growth increasingly supported by building projects. The development outlook depends on project documentation, infrastructure capacity and financing conditions supporting the new construction pipeline.
