In 2025, Serbia’s manufacturing and export sector faced a challenging landscape characterized by reduced external demand in key EU markets, stringent financing conditions, and increased compliance costs. Despite these pressures, export-oriented manufacturers managed to achieve revenue growth and maintain robust balance sheets. This performance highlights a shift in the industrial base towards margin protection, productivity enhancement, and revenue stability linked to currency fluctuations.
Real manufacturing output experienced modest growth of approximately 1.2% year-on-year in 2025. However, this figure conceals a more significant performance among producers heavily reliant on exports. Goods exports rose by around 8%, driven primarily by sectors such as automotive components, electrical equipment, metal processing, and certain niches within food processing. For manufacturers where exports constituted over 60% of total revenues, nominal turnover growth typically ranged from 6% to 12%, even as domestic sales showed little progress.
Exporters benefitted from revenues denominated in euros while their cost structures largely remained linked to the dinar. This currency arrangement provided a natural hedge that helped sustain EBITDA margins despite escalating labor and energy costs. In mid-sized export firms, EBITDA margins stabilized within the range of 10% to 14%, slightly lower than peak years but significantly better than domestic market counterparts, which operated at margins of 6% to 9%. Although net profit margins contracted due to rising financing and compliance expenditures, most established exporters continued to report positive profitability.
Capital expenditure patterns underwent a notable transformation. Companies shifted focus from capacity expansion to investments in automation, energy efficiency, and quality control measures. The average capital expenditure intensity decreased to 4% to 6% of revenues, compared to the previous range of 7% to 9% during earlier growth phases. This change reflects diminished visibility regarding external demand and an emphasis on maintaining liquidity amid higher interest rates. Export-oriented firms also improved working capital management by reducing cash-conversion cycles by 10 to 20 days through stricter receivables management and increased factoring usage.
Employment trends indicated that productivity gains took precedence over workforce expansion. Manufacturing employment either stagnated or saw slight declines despite revenue increases, suggesting improved output per employee. Wage pressures persisted, with average manufacturing wages rising between 9% and 11%, further encouraging automation and selective hiring strategies.
By the end of 2025, Serbia’s manufacturing exporters emerged as one of the strongest segments within the economy. Their financial resilience stemmed not from volume growth but from their export focus, favorable currency dynamics, disciplined capital expenditure practices, and stringent cost control measures. As they entered 2026, these firms remained cautious yet solvent, with balance sheets prepared for potential growth once external demand recovers.
