Serbia’s industrial sector recorded stronger momentum at the beginning of the second quarter of 2026, driven mainly by manufacturing and export activity, while declining electricity production remained a key constraint on the broader recovery. Total industrial production increased 3.4% year on year in April 2026, but growth for the January-April period was only 0.2%, indicating that the April improvement followed a weaker first quarter rather than a sustained acceleration from the beginning of the year.
Manufacturing Leads Industrial Recovery
Manufacturing provided the strongest contribution to industrial growth, with output rising 5.3% in April and 1% during the first four months of 2026. Mining production also improved in April, increasing 4.8% year on year, although cumulative output for January-April remained 1.3% lower than in the same period a year earlier. The weakest performance came from the electricity, gas, steam and air-conditioning supply sector, where production declined 7.7% in April and fell 2.3% cumulatively during January-April.
The gap between stronger factory output and weaker electricity generation is becoming increasingly significant for industry. Continued underperformance in thermal generation or hydropower could increase electricity imports, affect the export position of Elektroprivreda Srbije (EPS) and expose industrial consumers to higher regional electricity prices.
Capital Goods and Automotive Production Support Growth
Capital-goods manufacturing recorded the strongest expansion among industrial segments, rising 11.8% in April and 12.9% during January-April. The increase coincides with the production ramp-up at Stellantis’ Kragujevac facility, stronger activity among automotive suppliers and higher demand for electrical equipment, machinery and investment-related products.
Production of intermediate goods also improved, increasing 2.9% in April and 1.3% over the first four months, pointing to moderate recovery across upstream manufacturing sectors. Non-durable consumer goods recorded a smaller increase of 1.2% in April, although output in this category remained 0.6% lower during the January-April period.
Durable Goods Manufacturing Remains Under Pressure
Durable consumer goods continued to represent the weakest part of Serbia’s industrial performance. Production declined 19.7% year on year in April and 13.8% during January-April. The decline indicates difficult conditions for producers of furniture, household equipment, appliances and other discretionary consumer products.
Although retail sales of non-food products have strengthened, the improvement has not translated into comparable growth for domestic durable-goods manufacturers, suggesting that a significant share of consumer demand is being supplied through imports.
Industrial Inventories Rise as Export Sales Expand
Industrial inventories increased significantly during the first months of 2026. Total industrial stocks were 12.9% higher year on year in January-April, while manufacturing inventories increased 11.7% and mining inventories climbed 54.7%. Higher inventories can support future deliveries, but they may also indicate slower shipments or the accumulation of unsold materials. The increase in mining stocks is particularly relevant because it can tie up working capital and increase storage and logistics requirements.
Industrial turnover data provided a more positive signal. By April, total industrial turnover was 12.4% above the 2025 monthly average, with turnover on the domestic market increasing 6.7% and foreign-market turnover rising 18.6%. Export-oriented industrial sales therefore expanded significantly faster than domestic industrial activity.
Export Structure Increases Energy Dependence
Serbia’s industrial base is becoming increasingly focused on capital goods, vehicles, electrical equipment and metals, strengthening export potential while also increasing dependence on imported components, foreign market demand and reliable electricity supply.
The April improvement shows stronger momentum in manufacturing, particularly in export-linked sectors, but overall industrial growth remains limited with only 0.2% expansion during January-April 2026. Further recovery will depend on stronger domestic electricity production, converting higher inventories into completed sales and expanding industrial growth beyond automotive and capital-goods manufacturing.
