Development of the Construction Sector in Bulgaria in the First Half of 2026

The overall business climate indicator in Bulgaria is a weighted average of four sectoral indicators of the business climate – in industry, construction, retail trade and the services sector. Business surveys in industry, construction, retail trade and services collect information on entrepreneurs' opinions regarding the state and development of their business.

This article focuses only on the business climate in the construction sector.

Current construction activity and orders

Current construction activity starts the year 2026 at relatively moderate levels, with the balance of opinions slightly positive in the first months, but from April onwards the indicator deteriorates sharply and reaches strongly negative values (around −9.0 and −8.9 in May and June). This shows that at the beginning of 2026 construction companies still report some current activity, but by the end of the first half of the year there is a visible cooling in real construction output.

At the same time, the level of orders in construction remains structurally weak. Throughout 2026 the balance is negative and fluctuates between approximately −8.3 and −24.2. After a notable improvement at the beginning of the year, orders fall again towards levels close to the most negative values observed in 2024–2025. This confirms that insufficient orders are a persistent constraint for the sector, despite occasional improvements.

Staff, uncertainty and expectations

Expectations regarding staff movements over the next three months remain positive in 2026, which means that construction enterprises do not plan massive layoffs and in some months even expect a moderate increase in employment. The balance moves around 4–16 points, with the highest values at the start of the year and weakening optimism towards the end of the half-year.

Uncertainty about the future development of the business situation in construction shows a mixed picture. At the beginning of 2026 the balance improves significantly compared to 2024–2025 and in some months reaches almost neutral or slightly positive values, suggesting that entrepreneurs feel less uncertain about the short-term outlook. At the same time, towards the end of the first half uncertainty increases again, reflecting the influence of the general economic environment and fluctuations in orders.

Prices, business situation and payment delays

Expectations for sales prices in construction during the first six months of 2026 are clearly upward. The balance for this indicator ranges roughly between 23 and 36 points, meaning that construction entrepreneurs consistently expect prices of construction output to rise. This is most often associated with continued cost pressure from material prices and labour costs, as well as attempts to compensate weak demand through higher margins.

The current business situation in construction during 2026 fluctuates around 13–16 points, below the higher levels observed in 2024–2025, which indicates a more moderate, rather "cooled" assessment of current business conditions. The number of clients with payment delays remains relatively high – the balance in the first months of 2026 is about 14–18 points. In some months there is a slight improvement, but late payments continue to be a significant risk for the liquidity of construction companies.

Business climate and confidence

The composite indicator "business climate in construction" remains positive in 2026, but with notable volatility. At the beginning of the year it is around 15–16%, yet in April and June there are clear declines: in April the business climate in construction decreases from 14.1% to 11.4%, and in June it falls further to around 11.1%, due to more reserved assessments and expectations of construction entrepreneurs.

The confidence indicator in construction moves around zero – from slightly negative to slightly positive values (approximately between −8.7 and 2.8). This means that confidence in the sector is fragile and heavily dependent on the monthly dynamics of orders and the overall business climate.

Factors hindering construction activity in 2026

Labour shortages and competition

Regarding factors that hinder construction companies in 2026, the shortage of labour remains a key problem, with between roughly 36% and 48% of enterprises pointing to this factor. This reflects a systemic staff shortage, limiting the sector's capacity to increase output even when orders are available.

Competition in the sector is reported as a difficulty by around 20–25% of companies, which indicates strong competitive pressure and squeezed margins, especially under conditions of weak demand and sensitive material prices.

Material prices and uncertain economic environment

Material prices remain a consistently high problem, with about 32–45% of enterprises naming them as an obstacle, signalling prolonged cost pressure on construction activity. At the same time, an uncertain economic environment continues to be reported by around 44–56% of firms, although in 2026 there is a slight decrease compared to peak levels of about 60% in 2024–2025. This shows that macroeconomic uncertainty remains a structural backdrop and continues to affect investment decisions and new construction projects.

Other factors and "no difficulties"

Other factors mentioned include financial problems, unfavourable weather conditions and lack of materials/equipment, though with lower relative shares compared to labour shortages, material prices and uncertainty.

At the same time, the share of enterprises that state they "have no difficulties" increases in 2026 to about 15–17%, which is an indication that, for part of the construction companies, the environment is more stable and they manage to operate without serious problems despite the general risks.

Summary for H1 2026

For the first six months of 2026 the construction sector in Bulgaria is in a state of moderate activity with high uncertainty and strong structural constraints:

• current construction activity weakens towards the end of the half-year and orders remain insufficient;
• expectations for future activity and business conditions are more optimistic than the assessment of the present, but confidence remains fragile;
• labour shortages, material prices and the uncertain economic environment continue to be the main obstacles to sustainable growth, even though part of the enterprises report working without major difficulties.