Labour shortages are increasingly limiting the scale of new investment in Serbia despite an unemployment rate of 7.4% in the second quarter of 2026, the European Commission’s Serbia 2026 Report says. Dated 4 November 2026, the report describes the labour market as stable through the first half of the year.
Unemployment was down 1.3 percentage points from a year earlier, while the activity rate fell to 72.1%, partly accounting for the improvement in the jobless rate, according to the report. It says shortages of suitable workers are a common obstacle to larger investments and are only partly eased by inflows of foreign workers.
Demographic pressures and emigration reinforce labour constraints. Although youth unemployment has declined sharply over the past decade, brain drain continues to reduce the labour force’s size and skill level. Employers are also competing with rising public-sector and minimum wages.
The report says the investor question is shifting from “how cheap is labour?” to “can the required skills be recruited and retained?” Projects with stronger training systems and higher productivity are favoured, while labour-intensive investment is becoming less attractive. Serbia’s ability to keep growing will increasingly depend on participation, skills and automation rather than simply lowering unemployment.
