Serbia’s industrial sector concluded 2025 with a modest growth rate of 0.9%, as reported in the February 2026 edition of MAT – Macroeconomic Analyses and Trends. This figure indicates a significant slowdown compared to expectations at the beginning of the year, reflecting multiple pressures on the country’s industrial base.
The subdued growth is attributed to a combination of factors including decreased external demand from key eurozone markets, particularly Germany and Italy, climate-related fluctuations in electricity generation, and geopolitical risks impacting the energy sector. The analysis suggests that while Serbia did not experience a broad-based decline in industrial capacity, its reliance on a limited number of sectors has increased, rendering it more susceptible to shocks within these critical branches.
The downturn became particularly evident by December 2025, when total industrial production dropped by 5.7% compared to the same month in the previous year. This decline was not uniform across all sectors; while mining experienced a year-on-year increase of 4.4%, manufacturing faced an 8.3% decrease, ultimately dragging down overall industrial performance.
For the year as a whole, manufacturing output saw a slight increase of 1.1%, with mining growing by 4.7%. However, the electricity, gas, steam, and air-conditioning sector recorded a decline of 1.8%. The limited growth in manufacturing was particularly concerning given that only 12 out of 29 industrial branches reported increases in output during the year, indicating that less than half contributed positively to growth.
The MAT report highlights that the slowdown was influenced by both external economic conditions and significant changes within Serbia’s domestic landscape toward the end of the year. Global economic uncertainties and weakened European industrial performance constrained recovery efforts. A notable factor was the underperformance within the oil refining segment, particularly at the Pančevo refinery, which faced operational disruptions that heavily impacted expected industrial growth.
In December alone, production within the oil refining sector plummeted by 94.3% year-on-year, severely affecting overall manufacturing output for that month. This concentration of weakness underscores Serbia’s vulnerability; when one sector can drastically alter total manufacturing dynamics, it indicates an imbalance within the industrial structure.
Despite these challenges, there were sectors that demonstrated resilience. Mining consistently performed above average throughout 2025, with all branches experiencing growth in December. However, this upward trend appeared to weaken towards mid-2025.
The energy supply segment is also critical to Serbia’s industrial framework, comprising 15.3% of total production. After a downward trend starting in December 2023, this sector began stabilizing mid-2025 due to increased thermal electricity generation and solar energy production. However, drought conditions significantly reduced hydropower production throughout much of the year.
The manufacturing landscape reveals further complexity; while overall growth was marginally positive at 1.1%, internal disparities among sectors were pronounced. The automotive industry notably benefited from launching electric vehicle production at Fiat’s Kragujevac plant, contributing substantially to manufacturing growth.
Conversely, the food industry—a major component of manufacturing—saw output decline by approximately 1.5% over the year. This sector’s struggles are concerning given its potential influence on overall manufacturing dynamics.
The MAT report also sheds light on technological trends within Serbian industry; stable growth was observed only in capital goods production while other categories such as energy and consumer goods faced declines. This indicates a shift towards medium-technology segments rather than advancements into high-tech manufacturing.
Looking ahead to 2026 and beyond, Serbia’s industrial strategy may require reevaluation due to persistent weaknesses in its primary export markets within Europe. The current model emphasizes medium-technology manufacturing but may not yield substantial domestic value or resilience against external shocks.
As external conditions remain challenging—evidenced by softening indicators across Europe—the implications for Serbia’s industrial landscape are significant. The modest growth figure for 2025 serves as both a cautionary indicator and a diagnostic tool for future strategic planning within its industrial sectors.
