Serbia’s labour market recorded a stable unemployment rate in the first quarter of 2026, but employment levels declined compared with a year earlier, highlighting diverging trends between workforce participation and headline labour indicators.
During Q1 2026, the unemployment rate stood at 8.9%, unchanged from Q4 2025 and slightly below 9.1% recorded in Q1 2025. Despite the stable unemployment figure, the total number of employed persons decreased by 1.8% year-on-year, with reductions recorded among employees, self-employed workers and unpaid family workers.
Labour force composition shows employment pressures
The labour force in the first quarter comprised 2.836 million employed persons, 276,300 unemployed persons, and 2.479 million individuals outside the labour force.
The data indicates that employment trends did not mirror the positive signals seen in wage growth and consumer demand. While household spending and earnings continued to show strength, employment levels moved in the opposite direction. The figures point to a labour market where wage growth is occurring alongside limited gains in workforce participation and job creation.
Youth unemployment remains elevated
Youth unemployment remained significantly higher than the national average, reaching 23.1% during the first quarter. Long-term unemployment stood at 3.3%.
The labour market data reflects differences across regions and sectors. Higher-value activities such as information technology, professional services, administration and other knowledge-based industries remain concentrated in Belgrade and larger urban centres, while labour market conditions in smaller industrial regions follow different patterns.
The coexistence of wage pressures and elevated youth unemployment underscores mismatches between workforce skills, geographic distribution of labour and employer demand.
Hiring outlook tied to construction and manufacturing activity
Current projections indicate that Serbia’s unemployment rate is expected to remain within a range of 8.5% to 9.2% throughout 2026. Employment growth is forecast to remain weak, ranging between -0.5% and +0.5% for the full year unless hiring activity strengthens in construction and manufacturing industries. At the same time, wage growth is expected to continue exceeding employment growth, reinforcing the role of productivity and workforce allocation as key labour market considerations.
Workforce availability gains importance for investors
Labour market conditions are increasingly shaping investment decisions across sectors. For industrial projects located outside Belgrade, factors such as commuting patterns, vocational education capacity, housing availability, transport connectivity and competition from public-sector employment are becoming important considerations in workforce planning.
Businesses operating in service industries face separate challenges, including wage inflation affecting occupations in information technology, engineering, accounting, logistics management and technical sales. The labour market landscape is characterized by varying regional conditions, workforce availability constraints and differing sectoral demand patterns across the country.
