Industrial production in Serbia experienced a notable decline at the beginning of 2026, indicating challenges for the country’s manufacturing and energy sectors. Data from the Statistical Office of the Republic of Serbia reveals that total industrial output in January 2026 fell by 9.1% compared to January 2025, and was 14.4% lower than the average level recorded throughout 2025.
The downturn impacted all three primary industrial segments. Manufacturing output decreased by 12.4%, while mining operations saw a reduction of 2.3%. Additionally, the electricity, gas, and steam supply sector experienced a slight decline of 0.8% year-on-year.
A significant contributor to this decline was a temporary disruption within the oil processing industry. The Pančevo refinery, managed by NIS, faced operational interruptions due to pressures from U.S. sanctions, which hindered crude oil deliveries and consequently reduced refinery throughput during early January. This led to a staggering year-on-year drop of 73.3% in the production of coke and petroleum products, marking it as the most substantial negative factor affecting overall industrial output.
The manufacturing sector was broadly affected, with 15 out of 23 industrial branches reporting year-on-year declines. Noteworthy contractions included a 38% decrease in the production of computers, electronics, and optical products; a 28% drop in chemical industry output; and a significant 60% decline in the manufacturing of other transport equipment.
Despite these challenges, certain sectors displayed resilience. The automotive manufacturing segment emerged as a key positive contributor, with motor vehicle production rising by 58% compared to January 2025, partially mitigating losses in other areas.
When analyzing industrial production by end-use categories, energy-related output faced the most significant contraction, falling by 21.1% year-on-year due to reduced electricity generation and disruptions at refineries. Durable consumer goods production decreased by 14.9%, while non-durable consumer goods saw an 8% decline. Output of intermediate goods (excluding energy) also fell by 3.4%, indicating slower activity within upstream industrial supply chains.
The only major category showing growth was investment-related output, with capital goods production increasing by 8.6%. This suggests that demand for investment—particularly in machinery and equipment—remained relatively stable despite the overall industrial slowdown.
Month-to-month data presents a slightly more positive outlook. Seasonally adjusted figures indicate that industrial production rose by 1.6% in January compared to December 2025, with manufacturing output alone increasing by 3.0%. This suggests that part of the annual decline may be attributed to temporary disruptions rather than an enduring structural contraction.
These January figures follow a mixed performance for the industrial sector throughout 2025. Earlier in that year, sporadic growth was observed; however, by late 2025, signs of weakening had already begun to emerge. For instance, industrial output in November 2025 was down by 3.4% compared to November 2024, reflecting a gradual deceleration leading into the sharp downturn at the start of 2026.
Overall, the data for January indicates that Serbia’s industrial sector is facing pressures from energy-sector disruptions and weaker manufacturing performance across several key branches. The sustainability of this downturn will hinge on factors such as the normalization of refinery operations, recovery in export-oriented manufacturing, and broader trends in European industrial demand in the months ahead.
