Montenegro’s industrial production increased 13 per cent year on year in the first half of 2026, but the overall growth was primarily supported by electricity, gas and steam supply, while manufacturing activity remained broadly unchanged.
The first-half increase was driven by a 43.5 per cent rise in electricity, gas and steam supply, while mining and quarrying grew 0.5 per cent. At the same time, manufacturing production declined 0.4 per cent compared with the first six months of 2025.
June output rises on stronger energy and mining activity
Industrial growth accelerated in June, when total industrial production was 30.1 per cent higher than in June 2025. During the month, mining and quarrying output increased 71.6 per cent, while manufacturing grew 2.5 per cent. Electricity production was more than three times higher than in the same month a year earlier.
Compared with May, industrial production in June increased 21.1 per cent. Mining output rose 16.3 per cent, manufacturing increased 16.7 per cent, and electricity, gas and steam supply advanced 36.1 per cent month on month. The short-term acceleration was concentrated in sectors where production levels can vary significantly depending on operating conditions.
Hydropower conditions influence industrial figures
Electricity production in Montenegro is affected by hydrological conditions, reservoir levels and the availability of a limited number of generation facilities. Periods of favourable hydrology or the return of major generating units after maintenance can result in significant increases in production data without corresponding growth in industrial capacity. Similar effects can occur in mining, where output from a small number of production sites can have a notable impact on national industrial indicators.
Electricity sector supports economic activity
Higher electricity production provides economic benefits by reducing reliance on imports, supporting exports and improving the operating position of Elektroprivreda Crne Gore (EPCG). Increased domestic electricity availability can also support future electrification, renewable energy investment and industrial decarbonisation efforts.
Manufacturing recovery remains limited
Despite stronger overall industrial figures, manufacturing production in the first half of 2026 remained 0.4 per cent below the previous year’s level. The limited manufacturing performance corresponds with Montenegro’s trade data, which recorded declining exports alongside continued growth in imports of machinery, vehicles, pharmaceuticals, electrical equipment and processed goods. A broader industrial expansion would require growth in activities capable of converting domestic or regional resources into higher-value products.
Potential areas identified include aluminium and metal processing, wood processing, food and beverage production, marine services, electrical equipment assembly and construction-material manufacturing.
Energy capacity linked to future industrial development
Montenegro’s electricity-generation base can support industrial development when combined with long-term supply agreements, reliable grid capacity and verified low-carbon electricity production. Export-oriented manufacturers increasingly require information on the origin and carbon intensity of electricity, particularly when supplying European Union markets.
Investment focus requires separating output growth from structural change
Industrial policy assessments need to distinguish between electricity-sector fluctuations and long-term improvements in industrial productivity. Higher hydropower output can influence annual production, public revenues and trade figures, while indicators such as manufacturing employment, technology intensity and export diversification may remain unchanged. Montenegro’s first-half industrial performance showed stronger results in the electricity sector, while manufacturing has not yet recorded a comparable structural expansion.
