Serbia’s manufacturing growth remains concentrated in medium-technology industries, while high-tech production is contracting, raising questions about how quickly foreign investment and rising exports are moving the economy towards higher-value activities.
Manufacturing output increased 1.3% year on year in the first seven months of 2026, according to the September edition of the Macroeconomic Analyses and Trends bulletin.
Medium-high-technology industries expanded by 15.7% and contributed 3.2 percentage points to manufacturing growth. The improvement was driven largely by vehicles, electrical equipment, machinery and chemicals.
Every other technology category contracted. Medium-low-technology industries subtracted 1.1 percentage points from the result, while high-tech production reduced growth by 0.6 points.
Output of computers, electronic and optical products fell 18.2% in January-July. Pharmaceutical production declined 3.1%, including a 19.7% year-on-year contraction in July.
The divergence shows that stronger exports do not automatically mean Serbia is moving rapidly towards the most technologically sophisticated parts of global production.
Vehicle and trailer manufacturing increased 44.3% and generated €3.25 billion of exports. Electrical-equipment production grew 11.3%, while machinery output rose 9.9%.
These industries are more complex than traditional labour-intensive manufacturing and can support supplier development and technology transfer. However, a large share of their value may still depend on imported components, foreign intellectual property and decisions made by multinational parent companies.
The weakness in electronics and pharmaceuticals is therefore important. Those industries typically offer greater research intensity, productivity and export value per employee than assembly-led manufacturing.
Serbia’s next industrial-policy challenge is not simply to attract additional factories. It is to increase domestic engineering, software, research, component production and supplier ownership within the investments already operating in the country.
The automotive surge has lifted output and exports. The longer-term measure of success will be how much knowledge and Serbian value remain lich when the finished products hip abroad.
