Serbia’s manufacturing sector expanded in the first seven months of 2026, but growth remained concentrated in medium-high-technology industries while high-tech production declined.
Manufacturing output rose 1.3% year on year during January-July, according to the September edition of the Macroeconomic Analyses and Trends bulletin.
Medium-high-tech industries lead manufacturing growth
Medium-high-technology industries increased production by 15.7%, contributing 3.2 percentage points to overall manufacturing growth. The expansion was driven mainly by vehicle manufacturing, electrical equipment, machinery and chemicals. Vehicle and trailer production climbed 44.3%, with exports reaching €3.25 billion. Electrical-equipment output increased 11.3%, while machinery production rose 9.9%. These industries represent more complex manufacturing activities than traditional labour-intensive production and can contribute to the development of local suppliers and technology transfer. Their production can also remain substantially dependent on imported components, foreign intellectual property and strategic decisions by multinational parent companies.
High-tech production contracts
All other technology categories recorded declines during the period. Medium-low-technology industries reduced manufacturing growth by 1.1 percentage points, while high-tech production lowered the overall result by 0.6 percentage points. Output of computers, electronic and optical products fell 18.2% in the first seven months of the year. Pharmaceutical production declined 3.1%, including a 19.7% year-on-year drop in July. The contraction in electronics and pharmaceuticals contrasts with the expansion in automotive, electrical equipment and machinery production. These high-tech industries generally involve greater research intensity, productivity and export value per employee than assembly-oriented manufacturing.
Focus shifts toward domestic industrial capabilities
The manufacturing figures indicate that rising exports are not necessarily accompanied by rapid expansion in the most technologically advanced segments of production. For Serbia’s industrial policy, the challenge extends beyond attracting additional factories. Greater emphasis is needed on domestic engineering, software, research, component manufacturing and local supplier ownership within investments already operating in the country.
The strong performance of the automotive industry has increased both manufacturing output and exports, while the contraction in high-tech production highlights the different levels of technological activity across Serbia’s industrial base. The extent of domestic knowledge and Serbian value retained within exported finished products remains a key factor in assessing the longer-term industrial impact of the country’s manufacturing investments.
