Serbia’s manufacturing sector recorded its strongest gains in medium-high technology industries during the January–May 2026 period, with output in the segment increasing 15.3% and contributing 3.1 percentage points to overall manufacturing growth. At the same time, both high-technology and low-technology industries made negative contributions to manufacturing performance. The figures indicate that Serbia’s industrial expansion is being led by medium-high technology production rather than a broad-based increase in high-technology manufacturing.
Automotive and Engineering Industries Lead Expansion
Medium-high technology industries include sectors such as automotive manufacturing, machinery, electrical equipment, chemicals and engineering-intensive production. These activities support export growth, skilled employment, supplier development and technology transfer within the industrial economy.
The recovery of the automotive industry has played a central role in strengthening manufacturing output and improving Serbia’s external trade balance. Machinery and electrical equipment production also provide opportunities to expand industrial capacity, particularly when integrated into export markets and qualified supplier networks.
The development of these industries will determine whether medium-high technology production evolves beyond assembly operations toward greater engineering capabilities and higher domestic value added.
High-Technology Manufacturing Remains Limited
Manufacturing data show that high-technology production has yet to record broad-based acceleration despite the country’s established ICT services sector.
The production of advanced electronics, semiconductors, medical devices, precision instruments and optical products requires specialised supplier ecosystems, capital-intensive equipment, research partnerships, quality certification and long-term investment. While Serbia possesses capabilities in parts of this value chain, the current manufacturing figures do not indicate widespread growth across these high-technology industries.
Traditional Industries Continue to Face Challenges
Low-technology industries, including food processing, textiles, wood products and other traditional manufacturing activities, also weighed on overall industrial performance.
These sectors remain important sources of employment and economic activity across many regions of Serbia. Their weaker performance alongside stronger medium-high technology growth points to differing rates of industrial development across the country’s manufacturing base.
Investment and Industrial Policy Priorities
The current structure of manufacturing growth highlights opportunities in medium-high technology sectors including automotive supply chains, industrial equipment, power components, energy systems, specialised chemicals, process engineering and export-oriented machinery.
Further industrial upgrading depends on increasing domestic value added through engineering services, maintenance, testing, tooling, software integration and supplier development. Expanding these capabilities would strengthen the contribution of medium-high technology industries beyond labour-intensive assembly activities.
