Serbia’s labour market remained stable in early 2026, while real wages grew rapidly enough to become one of the main drivers of domestic demand. Average gross earnings reached RSD 164,682, or approximately €1,402, in January-April. Average net earnings increased to RSD 119,504, equivalent to €1,018.
Real wages rose 8.6% from the corresponding period of 2025, providing households with a meaningful increase in purchasing power after several years of elevated inflation. Consumer prices increased 2.9% in January-May, leaving wage growth comfortably positive in real terms.
The average salary does not describe the experience of the typical employee. The median net wage in April was RSD 94,585, or approximately €806. Half of all employees earned less than that amount.
The median was approximately 21% below the average, while the average was more than 26% above the median. The gap reflects the influence of higher salaries in ICT, finance, professional services, management and larger urban employers.
Employment totalled approximately 2.8 million in the first quarter, while the number of unemployed people stood at 276,300, a reduction of 13,100 from a year earlier. The employment rate for the population aged 15 and above was 50.7%, and unemployment stood at 8.9%.
The unemployment rate was unchanged from the fourth quarter of 2025 and slightly above the 8.2% recorded in the third quarter. The labour market is therefore stable rather than tightening uniformly across the economy.
Sectoral shortages coexist with national unemployment. Hospitality, transport and construction continue to report difficulty finding workers, leading employers to recruit from abroad. Foreign labour has become part of Serbia’s operating model rather than a temporary response to seasonal demand.
Construction faces particularly acute pressure because public infrastructure, commercial projects, housing and Expo-related developments compete for the same skilled trades. Labour shortages can delay schedules, increase contractor claims and raise final capital expenditure.
Transport and logistics companies confront a similar issue. Export growth, regional distribution and infrastructure projects increase demand for drivers, warehouse staff and technical personnel. Wage and accommodation costs for imported labour must be incorporated into long-term operating models.
Informal employment remains a structural weakness. It accounted for 11.3% of employment, but reached 50.8% in agriculture, compared with 5.9% outside agriculture. High informality limits tax collection, access to finance, productivity investment and social protection.
Agriculture’s informal structure also complicates investment and supply-chain compliance. Food processors and exporters increasingly require traceability, quality control and verified supplier data. Informal producers are less able to provide the evidence demanded by banks, retailers and international buyers.
Real wage growth is supporting household credit. Lending to individuals increased 21.1%, including 24.2% growth in cash loans and 20.4% in housing credit. Higher income and borrowing are reinforcing consumption, property demand and service-sector revenues.
The commercial benefit is visible across retail, banking, telecommunications, travel and residential development. The external cost is greater demand for imported consumer goods, vehicles, equipment and energy. Domestic consumption is expected to remain the main driver of GDP, while net exports make a negative contribution.
Wages are rising much faster than industrial output. Real earnings increased 8.6%, while industrial production grew only 0.6%. The difference is sustainable only where companies can raise productivity, prices or value added.
Export manufacturers face the greatest constraint because they cannot pass all cost increases to European customers. A stable dinar compounds the pressure: predictable exchange rates reduce risk but do not provide exporters with a currency adjustment against rising domestic wages.
Technology and professional services have greater pricing flexibility, especially where revenue is earned in euros or dollars. These sectors can support higher salaries, but they intensify competition for engineers, software specialists, project managers and multilingual professionals.
The education system and vocational training are becoming central to investment competitiveness. Serbia can attract capital through location, infrastructure and market access, but large projects will struggle when trained labour is unavailable or expensive.
Foreign-worker recruitment offers near-term relief but does not replace workforce development. Employers must address language, accommodation, safety training, permits and integration. Poorly managed recruitment can generate legal, reputational and project-execution risks.
Demographics add a longer-term constraint. An ageing population and outward migration limit labour-force growth. Productivity, automation and higher female and youth participation will become more important than simple headcount expansion.
The employment rate of 50.7% leaves potential for broader participation, but activating that potential requires childcare, transport, flexible work and regional job creation. Economic activity remains concentrated in Belgrade, Novi Sad and a limited number of industrial centres.
Serbia’s labour market is supporting the economy through higher wages and stable employment. The same trends are raising costs and restricting expansion in construction, transport, hospitality, manufacturing and technology. The decisive competitive advantage will come from productivity and skills rather than a return to low-cost labour.
