Montenegro’s construction sector entered 2026 with a firmer execution profile than a year earlier, but the latest MONSTAT data also show that the investment pipeline remains uneven and heavily dependent on the type of project being contracted. The first-quarter numbers point to modest growth in completed works and effective working hours, while new contracts show a split between stronger activity in buildings and weaker commitments in other construction categories.
The value of completed construction works in the first quarter of 2026 reached €164.8 million, compared with €156.8 million in the first quarter of 2025. That represents an increase of around 5.1% year on year, suggesting that construction companies entered the year with a larger volume of works being executed on sites. Effective hours worked on construction sites also increased, rising from 4.387 million hours in Q1 2025 to 4.419 million hours in Q1 2026. The rise was modest, but it confirms that the increase in completed works was not purely a price or accounting effect; it was also accompanied by a slightly higher level of labour activity on sites.
The value index of completed construction works gives the same message. Against the 2025 average, the first-quarter 2026 index stood at 97.1, above the 92.4 recorded in the first quarter of 2025. This indicates that Q1 2026 was stronger than the same seasonal point in the previous year, although still below the full-year average level. Construction in Montenegro is normally influenced by seasonality, permitting schedules, weather conditions, tourism-related project cycles and the timing of public infrastructure works, so a first-quarter reading below the annual average is not unusual.
The more important question is whether the sector is building momentum for the rest of the year. On that point, the data are mixed. New contracts on buildings increased strongly, reaching €25.8 million in the first quarter of 2026, compared with €13.2 million in the same quarter of 2025. That is a near doubling of contracted building works and suggests continued demand for residential, commercial, hospitality or mixed-use projects. For a market such as Montenegro, where coastal real estate, tourism facilities, urban housing and service-sector infrastructure are major drivers, this is a significant indicator.
However, new contracts on other buildings and structures moved in the opposite direction. They stood at €20.4 million in the first quarter of 2026, compared with €22.2 million in Q1 2025. The decline is not dramatic, but it shows that the non-building side of construction — which can include infrastructure, civil engineering works and other large physical structures — did not strengthen at the same pace as the building segment. This matters because civil engineering and infrastructure projects often have a larger multiplier effect on materials demand, transport, utilities, public investment and long-term productivity.
The contrast between completed works and new contracts is therefore central to the reading of the sector. Completed works are rising, which means the sector is still executing projects already in progress. But the forward-looking contract data suggest that momentum is not equally distributed. Building construction appears to be recovering more visibly, while other construction categories remain softer. If this pattern continues, Montenegro’s construction growth in 2026 could be more concentrated in real estate and building development than in broader infrastructure delivery.
The annual data for 2025 provide useful context. The value of completed construction works reached €678.7 million in 2025, up from €649.6 million in 2024 and €634.4 million in 2023. That shows a gradual increase in nominal construction output over the past three years. Effective hours worked also rose, from 17.385 million in 2023 to 17.663 million in 2024 and 18.079 million in 2025. The labour input trend therefore remained positive, indicating that the sector continued to absorb work despite cost pressures, labour shortages and project-delivery constraints.
The contract data are less encouraging over the same period. New contracts on buildings fell from €158.1 million in 2023to €130.9 million in 2024, and then to €71.2 million in 2025. New contracts on other buildings and structures also declined, from €172.8 million in 2024 to €125.7 million in 2025. That means the sector expanded its completed works in 2025, but the volume of newly contracted works weakened. In investment terms, this suggests that companies were still delivering existing projects, while the replenishment of the project pipeline became more selective.
The quarterly structure of 2025 also shows how much the sector depended on year-end acceleration. Completed construction works increased from €156.8 million in Q1 to €165.2 million in Q2, €168.2 million in Q3 and €188.5 million in Q4. Effective hours worked followed the same pattern, rising from 4.387 million in Q1 to 4.696 million in Q4. The value index moved from 92.4 in Q1 to 97.4 in Q2, 99.1 in Q3 and 111.1 in Q4. In other words, activity strengthened steadily through the year and peaked in the final quarter.
Against that background, the first quarter of 2026 should be read carefully. A Q1 value of €164.8 million is higher than Q1 2025, but below the strong Q4 2025 level of €188.5 million. This does not necessarily imply deterioration, because the first quarter is usually weaker than the final quarter. But it does mean that the sector has not yet carried the full year-end intensity of 2025 into the new year. The stronger year-on-year comparison is positive, but the real test will be whether Q2 and Q3 show the same sequential strengthening seen last year.
For Montenegro’s economy, construction has a broader role than the headline value of works. It feeds directly into demand for imported materials, cement, steel, machinery, transport services, engineering, architecture, labour and financing. It also affects municipal revenues, real estate supply, tourism infrastructure and the banking sector’s exposure to project finance and mortgage lending. A construction cycle driven mainly by buildings can support housing and hospitality investment, but it may not produce the same productivity gains as transport, energy, water, utility and public infrastructure works.
The data therefore point to a construction market that is active but not uniformly strong. Completed works and working hours are rising compared with the same period last year, which gives the sector a constructive start to 2026. At the same time, the decline in non-building contracts and the sharp fall in total building-contract values during 2025 show that investors, lenders and contractors still need to watch the depth of the project pipeline. A market can remain busy for several quarters on the back of previously signed contracts, but its medium-term strength depends on how quickly new projects are permitted, financed, contracted and moved into execution.
The first-quarter 2026 picture is therefore one of controlled recovery rather than a broad construction boom. Montenegro’s construction sector is delivering more completed works than a year earlier, and building contracts have improved sharply from last year’s first quarter. But the infrastructure and wider civil-engineering side remains less convincing, while the full-year contract trend from 2025 still warns against reading short-term execution as proof of a fully replenished investment cycle.
