Serbia’s merchandise exports continued to expand strongly in the first eight months of 2026 even as industrial production remained almost unchanged and manufacturing output declined in August. Industrial production rose just 0.1% year on year in January-August, while August output was 0.5% lower than a year earlier. Compared with the 2025 average, August industrial production was 4.6% lower. Short-term indicators also showed weaker activity. Seasonally adjusted industrial production decreased 0.6% in August from July, while manufacturing output fell 1.0% month on month.
Mining Growth Contrasts With Manufacturing Decline
The performance varied significantly across Serbia’s industrial sectors. Mining production increased 6.7% year on year in August, while output of electricity, gas, steam and air conditioning rose 0.8%.
Manufacturing moved in the opposite direction, contracting 1.8% in August and representing the main drag on overall industrial production. The figures show an uneven performance across Serbia’s industrial economy despite ongoing investment in manufacturing, mining and energy capacity.
Exports Rise Despite Flat Industrial Output
Serbia’s foreign trade recorded considerably stronger growth than domestic industrial production. Merchandise exports increased 8.8% to €23.7 billion in January-August, while imports grew 4.6% to €28.8 billion. As a result, the merchandise trade deficit narrowed 11.3% to €5.1 billion. The combination of almost 9% export growth and virtually unchanged industrial production indicates that external trade growth is concentrated among particular export industries and large producers rather than reflecting a broad increase across manufacturing.
Industrial Growth Remains Uneven
Serbia’s industrial performance is increasingly divided between stronger mining activity and selected export-oriented manufacturing operations, including businesses operating in automotive, electrical equipment, machinery and metals. These investments are adding capacity, but weaker parts of manufacturing are limiting the increase in total industrial output.
The difference is also visible when industrial production is compared with broader economic activity. Serbia’s GDP increased 3.8% year on year in the second quarter, substantially faster than industrial production. Construction, services, consumption and other parts of the economy are therefore contributing more strongly to overall growth than industrial production. Real retail turnover also increased 7.2% in January-August, significantly exceeding the growth rate recorded by industry.
European Demand Remains Important for Manufacturers
Serbian manufacturers are operating against a difficult European industrial environment. The EU accounted for 58.3% of Serbia’s total merchandise trade, making European manufacturing demand an important external factor for domestic factories. At the same time, stronger export figures show that Serbia’s largest and most competitive producers continued to expand sales in foreign markets. The remaining months of 2026 will show whether this export momentum broadens across domestic manufacturing, as Serbia combines strong export growth, robust household consumption and expanding GDP with almost stagnant industrial production.
