Serbia’s construction market is sending one of the clearest caution signals in the Q1 2026 data. The number of construction permits rose, but the estimated value of approved works collapsed. Serbia issued 6,043 construction permits in the first quarter, an increase of 8.9% year-on-year, yet the estimated value of works covered by those permits fell by 47.3% to RSD 237.3bn. That is not a technical statistical detail. It suggests that the market is processing more projects, but fewer large-ticket developments.
The broader construction output confirms the weakness. On the production side of GDP, construction contracted by 5.1%year-on-year in Q1 2026, following deep volatility in 2025. Effective hours worked and the value of construction works remained under pressure. For contractors, banks and public-sector clients, this indicates a market that is still absorbing delays, cost revisions, financing constraints and uncertainty around the sequencing of large infrastructure and real-estate schemes.
The regional distribution of planned works remains concentrated. Belgrade accounted for 37.1% of estimated works value, Vojvodina for 29.8%, Southern and Eastern Serbia for 17.2%, and Šumadija and Western Serbia for 16.0%. This confirms that capital deployment remains highly uneven, with Belgrade and Vojvodina still dominating the pipeline.
The base-case projection is for construction output to remain weak in the first half and move into modest recovery later in 2026, producing full-year real growth of between 0% and 2%. A stronger rebound toward 4% would require faster execution of public infrastructure, EXPO-related works, logistics parks, energy projects and utility upgrades. The downside case remains a second year of contraction if financing costs, permitting bottlenecks or public-investment sequencing delay execution.
For lenders, the message is direct: permitting volume is no longer enough. The quality, value and financing maturity of permitted projects matter more than the permit count. Serbia’s construction cycle has not disappeared, but it has become more selective. Projects with secured offtake, public backing, energy or logistics relevance, and bankable contractors will absorb capital first. Smaller residential and mixed-use schemes will continue, but the market’s next phase depends on whether large infrastructure and industrial projects move from announcement to execution.
