Serbia’s construction sector is facing a new wave of cost inflation, with prices of key building materials rising by as much as 30% since the beginning of 2026. The sharpest increases have been recorded in insulation products, reinforcing concerns that residential, commercial and infrastructure projects could face additional budget pressures during the remainder of the year.
According to suppliers and distributors, the largest increase has been recorded in hydro-insulation materials, particularly expanded and extruded polystyrene insulation (EPS and XPS), where prices have climbed approximately 30%. Products linked to steel manufacturing, including reinforcement bars, wire and nails, have increased between 15% and 20%, while cement, brick products and thermal blocks have recorded increases of around 5%. Roofing materials have risen by approximately 3%, while adhesives and mortar products have posted smaller increases.
The latest price surge reflects a combination of global and domestic factors. Internationally, uncertainty in energy markets, higher fuel costs and disruptions affecting raw-material supply chains through the Middle East have increased manufacturing and transportation costs. Difficulties linked to shipping routes around the Strait of Hormuz have added further pressure on construction material availability across Europe.
Domestic demand is also playing a major role. Serbia remains one of the most active construction markets in Southeast Europe, with large-scale infrastructure developments, residential construction and preparations for EXPO 2027 Belgrade creating substantial demand for steel, cement, insulation products and finishing materials. Suppliers report that strong purchasing activity is preventing inventories from rebuilding despite higher prices.
An additional factor influencing the market is Serbia’s temporary import protection regime covering selected construction products. Government measures introduced earlier this year affect several categories including cement and steel products. Once tariff-free quotas are exhausted, imports can face duties of up to 50%, reducing competitive pressure from foreign suppliers and contributing to upward pricing trends. The total tariff-free quota volume amounts to approximately 421,094 tonnes, including more than 250,000 tonnes allocated to cement imports.
Particularly notable is the rise in steel-related materials. Market participants report that reinforcement steel prices have increased from roughly €690 per tonne at the beginning of the year to around €800 per tonne, representing one of the most significant cost increases for structural construction projects.
Supply-chain challenges are becoming increasingly visible. Distributors report shortages of gypsum boards and other finishing materials, while delivery times that previously required only a few days can now extend to several weeks. These delays are creating scheduling risks for contractors and developers attempting to maintain construction timelines.
For investors, developers and construction companies, the implications extend beyond material procurement. Rising input costs are gradually feeding into higher construction costs per square meter, placing pressure on project margins and potentially supporting further increases in residential and commercial property prices. Infrastructure projects financed under fixed-price contracts may also face margin compression unless cost escalation mechanisms are available.
The current environment increasingly resembles the post-pandemic construction cycle, when supply disruptions and surging demand produced rapid material inflation across Europe. With EXPO 2027 construction activity continuing to accelerate and global logistics remaining volatile, Serbia’s construction sector appears likely to operate under elevated cost conditions for the foreseeable future.
