The construction sector in Montenegro has commenced 2026 with improved performance metrics compared to the previous year, according to recent data from MONSTAT. While the value of completed construction works has increased, the investment pipeline remains inconsistent, influenced by the nature of projects being undertaken. The first quarter of 2026 has shown modest growth in both completed works and effective working hours, although new contracts reveal a disparity between robust activity in building projects and weaker commitments in other construction categories.
In the first quarter of 2026, the total value of completed construction works reached €164.8 million, an increase from €156.8 million during the same period in 2025, reflecting a year-on-year growth of approximately 5.1%. This uptick indicates that construction companies are engaging in a higher volume of work on-site. The effective labor hours worked also saw a slight rise, increasing from 4.387 million hours in Q1 2025 to 4.419 million hours in Q1 2026, suggesting that the growth in completed works was not solely due to price adjustments but also involved greater labor activity.
The value index for completed works supports this trend, with an index of 97.1 for Q1 2026 compared to 92.4 for Q1 2025. Although this indicates stronger performance than the previous year’s first quarter, it remains below the average level for the entire year. Factors such as seasonal influences, permitting schedules, and public infrastructure timelines typically affect construction activity in Montenegro.
A key area of focus is whether the sector can sustain momentum throughout the year. New contracts for building projects surged to €25.8 million in Q1 2026, nearly doubling from €13.2 million in Q1 2025, indicating continued demand for various types of building developments. In a market like Montenegro’s, where real estate and tourism-related projects are significant drivers, this increase is noteworthy.
Conversely, new contracts for other buildings and structures experienced a decline, falling to €20.4 million in Q1 2026 from €22.2 million in Q1 2025. While not a drastic decrease, this trend highlights that sectors such as civil engineering and infrastructure did not exhibit the same growth as building projects. This distinction is important as infrastructure projects typically have broader economic impacts through materials demand and public investment.
The contrast between rising completed works and fluctuating new contracts underscores the current state of the sector. While ongoing projects are being executed successfully, forward-looking contract data suggests uneven momentum across different construction categories. Building construction is recovering more visibly than other segments, which could lead to a concentration of growth within real estate development rather than broader infrastructure advancements.
Looking back at annual figures for 2025 provides additional context: completed construction works totaled €678.7 million, up from €649.6 million in 2024 and €634.4 million in 2023. Effective working hours also rose steadily over these years, indicating that despite challenges such as cost pressures and labor shortages, the sector managed to absorb increased workloads.
However, contract data from previous years presents a less favorable picture. New contracts for buildings decreased significantly from €158.1 million in 2023 to €71.2 million in 2025, while contracts for other structures also dropped from €172.8 million to €125.7 million during the same period. This decline suggests that while existing projects were being fulfilled, there was a noticeable slowdown in securing new contracts.
The quarterly breakdown for 2025 illustrates how reliant the sector was on end-of-year acceleration: completed works rose consistently throughout the year but peaked significantly in Q4 at €188.5 million compared to €156.8 million in Q1. This pattern indicates that while first-quarter performance for 2026 is an improvement over last year’s figures, it has not yet matched the heightened activity levels seen at year-end.
Construction plays a vital role in Montenegro’s economy beyond just its direct output; it influences demand for materials and services across various sectors including transport and finance. A construction cycle primarily driven by building projects may support certain investments but might not yield similar productivity gains associated with infrastructure developments.
The current data reflects an active construction market with rising completed works compared to last year; however, there are concerns regarding non-building contracts and overall project pipeline depth following declines observed throughout 2025. The first quarter of 2026 suggests cautious recovery rather than an outright boom, with notable improvements in building contracts contrasted by weaker performance in civil engineering and infrastructure sectors.
