Serbia’s average net wage increased by almost 10% year on year in May 2026, while the number of registered employees remained below its level a year earlier, pointing to a labour market where rising pay is playing a larger role than employment expansion. Average monthly net earnings reached RSD 118,398 in May, compared with RSD 107,705 in May 2025, representing an increase of just under 10%.
With consumer-price inflation at 3.5% in May, the increase in nominal earnings translated into a substantial rise in real wages and stronger household purchasing power. The employment data show a less pronounced expansion in the labour market. Registered employment stood at approximately 2.321 million people in May, down from around 2.333 million a year earlier.
Fewer unemployed workers tighten labour conditions
Registered unemployment also declined during the period, falling from approximately 351,000 to 337,000 people. The combination of fewer unemployed workers and limited growth in the number of registered employees indicates a tightening labour market rather than a significant expansion in the number of jobs.
For companies competing for available workers, the smaller pool of unemployed labour increases pressure to improve pay in order to attract and retain employees. Households, meanwhile, are benefiting from the combination of faster wage growth and lower inflation. As consumer-price growth moderates, a larger portion of nominal wage gains translates into additional purchasing power. Stronger real incomes can support retail activity, consumer lending and housing demand, adding to household-side economic activity.
Higher labour costs put pressure on corporate margins
For businesses, however, rapid wage growth creates a more demanding cost environment. Companies need productivity gains to keep higher labour expenses from reducing profit margins and export competitiveness. Serbia’s manufacturing sector has for years benefited from labour costs that remain below those of most EU member states, while companies retain close access to European supply chains.
The pace of wage convergence is therefore important for the industrial model. Faster wage growth can raise household incomes, but if labour costs increase more rapidly than productivity, part of Serbia’s cost advantage over competing production locations becomes narrower.
Labour market shifts toward higher productivity
The latest employment and wage figures illustrate a broader change in Serbia’s economic structure. The challenge is increasingly not limited to creating additional low-cost employment, but to moving existing workers into more productive activities capable of supporting higher wages without undermining corporate profitability.
With registered employment at 2.321 million and unemployment falling to around 337,000, the labour market is providing less scope for growth based simply on absorbing a large pool of unemployed workers. At the same time, the rise in average net wages to RSD 118,398 indicates that higher remuneration is becoming an increasingly important feature of Serbia’s labour market.
