Serbia’s labour market is showing a widening divide between rapidly increasing earnings and declining employment in several industrial sectors that previously supported the country’s manufacturing and foreign-investment expansion. Total registered employment decreased by 14,163 people year on year in the second quarter of 2026, falling to approximately 2.356 million.
Manufacturing experienced the largest employment decline, with 17,422 fewer jobs. Wholesale and retail trade, including vehicle repair, recorded a reduction of 4,276 positions, while mining and quarrying employment fell by 1,134. The contraction is occurring alongside strong wage growth, particularly in professional services, finance, information technology, energy and the public sector.
Average earnings exceed €1,000 while median pay remains lower
Average net earnings reached RSD118,398 in May, slightly above €1,000. The median net salary was considerably lower at RSD93,277, equivalent to approximately €795. The median figure means that half of formally employed workers earned less than that amount, highlighting a substantial difference between average earnings and the pay received across the middle of the labour market.
The divergence reflects increasing segmentation between highly qualified and lower-paid occupations. Engineers, software specialists, financial professionals, project managers and experienced technicians can command substantially higher salaries, while lower-skilled workers in manufacturing, retail and services remain closer to the median wage.
Industrial projects compete for a limited technical workforce
Serbia is simultaneously experiencing surplus labour in some lower-productivity occupations and acute shortages in engineering, energy, construction and industrial maintenance. New power plants, transmission lines, mines, processing facilities, roads and railways are competing for a limited pool of electricians, welders, mechanical engineers, civil engineers, commissioning specialists and qualified machine operators.
The shortage is directly affecting project economics. EPC contractors face higher wage requirements, the need to recruit workers from abroad or greater reliance on subcontractors whose technical capabilities can vary. These constraints can make construction schedules more difficult to maintain and increase commissioning and operational-readiness risks when qualified personnel are recruited too late.
Manufacturing sheds jobs despite modest output growth
The decline in manufacturing employment is occurring alongside slightly positive industrial production, suggesting that some parts of the sector are increasing automation or consolidating their operations. The employment reduction may also reflect weaker European orders, lower use of temporary workers and difficulties affecting smaller domestic suppliers.
Serbia’s earlier investment model relied heavily on comparatively inexpensive labour combined with financial incentives for foreign manufacturers. Rising wages and a shrinking working-age population are making that model less sustainable. Future industrial projects will therefore need to generate greater output and value with fewer employees.
Automation and specialised services gain importance
The changing labour market creates opportunities for industrial automation, industrial software, equipment maintenance, engineering outsourcing and specialised technical services. It also changes the economic role of foreign direct investment. Projects that build domestic engineering capabilities and supplier networks can address more of Serbia’s labour and productivity constraints than investments focused primarily on adding assembly capacity.
The shift increases the importance of matching vocational education and employer-led training with actual industrial and infrastructure project pipelines. Serbia also needs more effective mechanisms for encouraging professionals to return and clearer arrangements for importing qualified foreign workers. Labour availability has consequently become a direct consideration in project bankability, construction pricing and long-term industrial competitiveness, alongside wages, financing and access to equipment.
