The year-on-year growth of industrial production in Serbia in November 2023 was 3.6%, while the cumulative year-on-year increase in the January-November period was 2.6%.
However, without an increase in production in the manufacturing sector, significantly more modest growth rates for the overall industry can be expected, as stated in the January issue of the magazine “Macroeconomic Analyses and Trends” (MAT).
“In November 2023, after three months of continuous year-on-year growth, the positive contribution of the mining sector was absent, where production was lower compared to the same month in 2022 by 0.02%. At the same time, the manufacturing sector increased by 2.5%, and the sector of electricity, gas, steam, and air conditioning supply by 10.3%,” stated in MAT.
It is added that for eleven months in 2023, the year-on-year growth of total industrial production of 2.7%, cumulatively observed, was mainly contributed by electricity production, with 2.13 percentage points. Following is the manufacturing sector with 0.4 percentage points, while the performance of the mining sector is more modest – 0.14 percentage points.
“When the sectoral dynamics of production are measured by the current trend, similar to overall production, the impression is gained that all three sectors are in stagnation or close to it. In the mining sector, with negligible oscillations, a similar level of production has been maintained since the first quarter of 2022. For this reason, the growth of this sector in 2023 was the lowest,” emphasized in MAT.
The trend of stagnation in the production of the manufacturing sector, as noted, lasted in the first nine months of 2023. It is added that although not yet as convincing, the trend also tends to the production of the sector of supplying electricity, gas, steam, and air conditioning.
“A short-term revival of the manufacturing sector in the conditions of a pronounced economic downturn in the eurozone is unlikely. A positive turnaround in the trend, in the second half of 2024, is possible if mass production of an entirely new model of Fiat Panda is launched in Kragujevac.
But that should not be talked about now but when the time comes. Until then, a tough fight needs to be fought to maintain the current level of production,” said the MAT associates. The year-on-year decline in the physical volume of production in October in the eurozone, as stated, reached 6.6%, so since March 2023, when the first year-on-year decline was recorded, the downturn has been getting stronger.
The problems in the eurozone are, it is added, more complex in the manufacturing sector, where the year-on-year decline is more than 7%, and at the same time, the number of European countries with a double-digit decline in production is increasing. Movements within the manufacturing industry show that there is no stable trend and that monthly jumps are mostly incidental and unpredictable. The value of Serbia’s foreign trade in November 2023, year-on-year, decreased for the eighth consecutive month.
Compared to November 2022, the value of trade decreased by 2.1%. Merchandise exports for the first eleven months of 2023 amounted to EUR 26.4 billion, so it is possible that for the entire year, revenues from merchandise exports will reach EUR 29 billion or 42% of gross domestic product (GDP). Ten years ago, the total merchandise exports of Serbia were worth EUR 11 billion, which was 30% of GDP.
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