Construction activity rose by 9% in real terms in the second quarter of 2026, driven by a surge in building construction. Civil engineering and most regions, however, remained in decline.
Serbia’s construction sector recorded a strong headline recovery in the second quarter of 2026, although the underlying figures reveal a sharply divided market.
The value of construction work performed within Serbia increased by 20.6% at current prices compared with the same quarter of 2025, according to preliminary data from the Statistical Office of the Republic of Serbia. After adjusting for changes in construction costs, real growth amounted to 9%.
The difference between nominal and real growth—11.6 percentage points—shows that higher prices remained an important contributor to the increase in the monetary value of construction activity. Nevertheless, the real expansion confirms that the sector produced a larger volume of work than a year earlier.
Buildings drive the recovery
Construction growth was generated almost entirely by work on buildings. At constant prices, the value of building construction in Serbia increased by 32.4% year on year. Civil engineering, which includes transport infrastructure, pipelines and other large infrastructure projects, declined by 7.1%.
This divergence is also visible in the figures for Serbian contractors’ total activity, including projects performed abroad. Building work increased by 30.2% in real terms from the second quarter of 2025, while civil engineering declined by 7.7%.
The results suggest that residential, commercial and other building projects were the principal engine of the sector’s recovery. Infrastructure construction continued to act as a drag.
Growth heavily concentrated in Belgrade
Regional data reveal an even more pronounced imbalance. At constant prices, construction activity increased only in the Belgrade Region, where it rose by 51% compared with the second quarter of 2025.
Activity fell in every other statistical region:
- Southern and Eastern Serbia recorded the largest decline, at 32.3%.
- Šumadija and Western Serbia registered a decrease of 27.5%.
- Vojvodina experienced a comparatively moderate contraction of 2%.
The national increase therefore does not represent a broad-based recovery across Serbia. Rather, the results point to a strong concentration of investment and project execution in Belgrade.
Such a pattern may increase regional disparities in construction employment, investment and demand for related industries. It also means that the national result is particularly dependent on the timing and completion of major projects in the capital.
Strong quarter, modest first half
Compared with the first quarter of 2026, the real value of work performed by Serbian contractors increased by 54.5%. However, quarterly construction figures are strongly influenced by seasonal conditions, so this comparison should be treated cautiously.
The cumulative results provide a more restrained picture. During the first half of 2026, the real value of all work performed by Serbian contractors—both in Serbia and abroad—was only 0.2% higher than in the corresponding period of 2025. For work performed within Serbia, the increase was 1.3%.
Buildings again produced the strongest result, growing by 25% in real terms within Serbia during the first six months. Civil engineering activity declined by 13.7%.
The contrast between modest first-half growth and the much stronger second-quarter result indicates that construction activity accelerated considerably after a weak start to the year.
Contractors retreat from foreign projects
Serbian construction companies performed 99.1% of their work within the country during the second quarter. Projects abroad accounted for only 0.9% of the total.
The real value of work performed abroad fell by 49.5% year on year and by 52.1% during the first half of 2026. Although the foreign share is too small to determine the sector’s overall direction, the figures indicate a substantial reduction in Serbian contractors’ activity outside the domestic market.
New contracts provide a mixed signal
The value of contracted work offers a less certain view of future construction activity.
At current prices, new contracts in the second quarter were worth 6.2% more than a year earlier. In real terms, however, their value declined by 4%. This suggests that the nominal increase was more than offset by higher construction costs.
For the first half of the year, the picture was more positive: contracted work increased by 30.6% at current prices and 19.7% at constant prices. The strong six-month result could support activity in subsequent quarters, but the second-quarter slowdown raises questions about whether that momentum will be sustained.
Overall, Serbia’s construction sector entered the middle of 2026 with stronger output, led by building projects and an exceptional expansion in Belgrade. The recovery remains uneven, however. Weak civil engineering, declining activity across most regions and softer real growth in newly contracted work all point to risks beneath the positive national headline.
The figures are preliminary and are based on a quarterly survey of enterprises considered important for construction activity rather than a complete census of every construction company.
