Serbia recorded 6,043 construction permits in the first quarter of 2026, marking an 8.9% year-on-year increase, while the estimated value of works covered by these permits declined significantly.
The total estimated value of approved construction works fell 47.3% year-on-year to RSD 237.3bn during the same period. The divergence shows higher permit issuance alongside a substantially lower aggregate value of authorised projects.
Construction output declines amid ongoing volatility
In terms of production, the construction sector contracted 5.1% year-on-year in Q1 2026 as part of continued fluctuations observed during 2025.
Effective hours worked and the value of completed construction works remained under pressure during the quarter. The data reflect ongoing impacts related to project delays, revisions in cost structures, financing conditions, and uncertainty in the timing of infrastructure and real-estate developments.
Regional distribution of construction activity
The allocation of planned construction works remained concentrated across a limited number of regions. Belgrade accounted for 37.1% of the total estimated value of works.
Vojvodina represented 29.8%, while Southern and Eastern Serbia accounted for 17.2%. Šumadija and Western Serbia held 16.0% of the total estimated construction works value.
Outlook scenarios for 2026 construction activity
Projections for the construction sector indicate a baseline expectation of subdued activity in the first half of 2026, followed by a gradual recovery later in the year. Under this scenario, full-year real growth is expected to range between 0% and 2%.
An alternative scenario points to growth of up to 4%, contingent on accelerated execution of public infrastructure works, EXPO-related construction, logistics facilities, energy projects, and utility upgrades. A downside scenario includes another year of contraction if financing conditions, permitting processes, or sequencing of public investment continue to delay project execution.
Lending conditions and project composition remain central to construction activity. Projects with secured offtake arrangements, public-sector backing, infrastructure or logistics components, and established contractors are positioned to proceed earlier in the cycle. Smaller residential and mixed-use developments continue to be part of the pipeline, while overall sector activity remains dependent on the transition of large-scale infrastructure and industrial projects from approval stages into execution.
