Serbia’s industrial production declined 2.3% year on year in July 2026, as lower energy and manufacturing output outweighed gains in mining and investment-oriented industries, according to the Statistical Office.
For the first seven months of the year, industrial production remained just 0.3% above the corresponding period of 2025. On a seasonally adjusted basis, total output increased 0.6% from June, although manufacturing production fell 1.9% month on month. The industrial performance contrasts with stronger overall economic growth. Serbia’s GDP expanded 3.8% year on year in the second quarter, exceeding the earlier 3.6% estimate, with construction, household consumption and services providing significant support.
Energy and manufacturing remain the main constraints
Manufacturing output fell 1.6% year on year in July, while electricity, gas, steam and air-conditioning supply contracted 8.8%. Mining production increased 3.0%. The decline was spread across 18 industrial divisions representing around 60% of total industrial output, while 11 divisions accounting for the remaining 40% recorded growth.
Energy production remained a significant drag on the industrial sector. Electricity, gas, steam and air-conditioning supply was 4.8% lower in January-July than a year earlier, while output classified for energy use fell 7.5% in July and 4.2% during the first seven months. Manufacturing performance was more varied. Although factory output fell 1.6% in July, cumulative manufacturing production remained 1.3% higher than a year earlier.
Capital goods and automotive production expand
Investment-oriented industries continued to record substantial increases. Capital-goods production rose 8.8% year on year in July and 10.9% in January-July. Motor vehicle, trailer and semi-trailer production increased 29.6% in July, while cumulative output for January-July was 44.3% higher than a year earlier. Electrical equipment production also expanded, rising 10.7% in July and 11.3% during the first seven months. Machinery and equipment output increased 13.6% year on year in July and 9.9% in January-July.
Other manufacturing segments also recorded gains. Chemical production increased 5.3% in July, while non-metallic mineral products rose 6.0%. Wood-processing production increased 12.8%, and paper and paper products grew 2.1%. Food manufacturing was broadly stable, with output up 0.7% year on year in July, although cumulative production for January-July was slightly below the previous year.
Metals, refining and consumer goods weaken
Several established industrial segments recorded significant declines. Basic metals production fell 16.6% year on year in July and was 12.5% lower in January-July. Fabricated metal products declined 6.5% in July and 7.8% over the first seven months. Production of computers, electronic and optical equipment fell 7.5%, while pharmaceutical production dropped almost 20%. Coke and refined petroleum products declined 13.0% in July and 3.8% during January-July. Production of other transport equipment fell almost 59% year on year in July.
Consumer-oriented manufacturing was also weaker. Durable consumer goods output fell 7.9% in July and 12.6% in January-July, while non-durable consumer goods decreased 5.1% and 1.7%, respectively. Textile production dropped 12.2% year on year in July, clothing production fell 12.9%, and leather products declined 4.7%.
Mining provides support to industrial output
Mining was one of the sectors supporting the July industrial index. Total mining production increased 3.0% year on year, including an 8.4% increase in coal extraction and a 1.1% rise in crude oil and natural gas production. Metal ore mining declined 0.9% in July, although output remained 2.3% higher during January-July.
The sector has become an increasingly important component of Serbia’s industrial and export activity amid substantial investment in copper and gold production, particularly around Bor in eastern Serbia.
Industrial growth remains uneven
The latest figures show continued strength in selected investment-related industries despite weakness elsewhere. Intermediate goods excluding energy increased 0.3% year on year in July and 2.0% during January-July, while capital goods maintained double-digit cumulative growth. The gap between expanding vehicle, electrical-equipment and machinery production and declining energy, metals, petroleum refining and consumer manufacturing remains a defining feature of the industrial sector.
The seasonally adjusted figures also point to an uneven recovery: total industrial output increased 0.6% from June, while manufacturing declined 1.9%. This performance contrasts with the broader economy, where GDP grew 3.8% in the second quarter, compared with only 0.3% growth in industrial production during the first seven months. Construction, services and household consumption are consequently accounting for a larger share of the current expansion.
Within industry, the strongest cumulative gains came from motor vehicles, up 44.3%; electrical equipment, up 11.3%; machinery, up 9.9%; and capital goods, up 10.9%. At the same time, energy production declined 4.2%, durable consumer goods 12.6% and basic metals 12.5%. Serbia’s industrial performance in the remainder of 2026 will reflect the contrasting trends between expanding automotive and investment-goods production and continued weakness across energy and several traditional manufacturing segments. July’s 2.3% annual contraction leaves industrial output significantly weaker than the pace of overall GDP growth.
