Serbia’s labour market is moving in two directions at once. Earnings are rising rapidly, particularly in professional services, finance, information technology, energy and the public sector. At the same time, registered employment is declining in several industries that previously carried much of the country’s foreign-investment and manufacturing expansion.
Total registered employment fell by 14,163 people year on year in the second quarter of 2026, to approximately 2.356mn. Manufacturing recorded the largest contraction, losing 17,422 jobs. Wholesale and retail trade, including vehicle repair, lost 4,276 positions, while mining and quarrying recorded a decline of 1,134.
The employment contraction contrasts with strong salary growth. Average net earnings reached RSD118,398 in May, slightly above €1,000, while the median stood at only RSD93,277, or approximately €795. Half of formally employed workers earned less than the median amount.
The gap between the average and median salary points to an increasingly segmented labour market. Highly qualified engineers, software specialists, financial professionals, project managers and experienced technicians can command significantly higher salaries. Lower-skilled industrial, retail and service workers remain much closer to the median.
Serbia simultaneously has excess 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.
This shortage is increasing project costs. EPC contractors must pay higher salaries, import workers or rely on subcontractors with uneven technical capacity. Construction schedules become more difficult to maintain, while commissioning and operational-readiness risks increase when qualified personnel are recruited too late.
The decline in manufacturing employment alongside slightly positive industrial production suggests that parts of the sector are becoming more automated or consolidating operations. It may also reflect weaker European orders, reductions in temporary employment and difficulties among smaller domestic suppliers.
Serbia’s earlier investment model relied heavily on relatively inexpensive labour and financial incentives offered to foreign manufacturers. That model is becoming less sustainable as wages rise and the working-age population contracts. Future projects will need to produce more value with fewer employees.
This creates opportunities for automation, industrial software, equipment maintenance, engineering outsourcing and specialised technical services. It also changes the role of foreign investment. The most valuable projects will be those that create domestic engineering competence and supplier networks rather than simply adding assembly capacity.
Vocational education and employer-led training must be aligned with real project pipelines. Serbia also needs more effective incentives for returning professionals and clearer arrangements for importing qualified workers. Labour availability is no longer only a social issue; it has become a central factor in project bankability, construction pricing and long-term industrial competitiveness.
