As Montenegro’s construction sector embarks on 2026, recent data indicates a stronger start compared to the previous year, although the investment landscape remains inconsistent. According to MONSTAT, the first quarter of 2026 has seen an uptick in completed construction works and effective working hours, yet new contract activity reveals a divide between robust building projects and weaker performance in other construction categories.
The total value of completed construction works in Q1 2026 reached €164.8 million, marking a 5.1% increase from €156.8 million in Q1 2025. This growth suggests that construction firms are actively engaged in executing a larger volume of projects. Additionally, effective hours worked on construction sites increased slightly from 4.387 million hours in Q1 2025 to 4.419 million hours in Q1 2026, indicating that the rise in completed works is supported by a modest increase in labor activity.
The value index for completed works reflects similar trends, with the Q1 2026 index at 97.1, up from 92.4 in Q1 2025. While this improvement signals a stronger first quarter compared to the previous year, it remains below the average levels typically observed throughout the year. Seasonal factors such as permitting schedules and weather conditions often influence construction activity in Montenegro, making lower first-quarter figures common.
New contracts for building projects surged significantly, totaling €25.8 million in Q1 2026, nearly doubling from €13.2 million during the same period last year. This increase highlights ongoing demand for residential and commercial developments, which are crucial for Montenegro’s economy driven by tourism and urban housing needs.
Conversely, new contracts for other types of construction projects declined slightly to €20.4 million in Q1 2026 from €22.2 million in Q1 2025. Although this decrease is not substantial, it underscores a slower pace of growth for civil engineering and infrastructure projects, which typically have broader economic implications due to their impact on materials demand and public investment.
The juxtaposition between rising completed works and fluctuating new contracts raises questions about the sector’s momentum going forward. While building construction appears to be recovering robustly, other segments are lagging behind. If this trend persists, construction growth in Montenegro for 2026 may lean more towards real estate development rather than comprehensive infrastructure advancement.
Looking back at 2025 provides additional context: completed construction works amounted to €678.7 million, an increase from €649.6 million in 2024 and €634.4 million in 2023. Effective working hours also rose steadily over these years, suggesting that despite challenges like cost pressures and labor shortages, the sector has managed to sustain its output.
However, new contract figures tell a different story; they fell from €158.1 million in 2023 to €130.9 million in 2024 and further down to €71.2 million in 2025 for buildings alone. Similarly, contracts for other structures decreased from €172.8 million in 2024 to €125.7 million in 2025, indicating that while existing projects were completed successfully, new project initiation has become more selective.
The quarterly breakdown for 2025 illustrates the sector’s reliance on end-of-year acceleration: completed works increased consistently throughout the year but peaked significantly in Q4 at €188.5 million compared to only €156.8 million in Q1.
In light of these trends, the first quarter of 2026 should be interpreted with caution; while the value of €164.8 million is an improvement over Q1 2025, it falls short of the robust Q4 figures from the previous year. The true test will be whether subsequent quarters can replicate last year’s upward trajectory.
Construction plays a vital role beyond mere output figures; it drives demand for imported materials and influences various sectors including real estate and banking through project financing and mortgage lending activities. A construction cycle predominantly focused on buildings may support immediate investment needs but might not yield equivalent productivity enhancements as broader infrastructure projects would.
Overall, while there are signs of recovery within Montenegro’s construction market as evidenced by increased completed works and improved building contracts compared to last year, challenges remain evident particularly within civil engineering sectors and overall contract volumes from previous years that warrant careful monitoring moving forward.
