Employment grows, but there is greater tension in production and sales

Employment grows, but there is greater tension in production and sales

The data came from the III Survey on Industrial Indicators and Expectations that was released this Wednesday by the Argentine Industrial Union (UIA) with data collected throughout the first half of August on 500 companies.

According to the survey, the outlook in the industry remains with difficulties: the tensions registered in the production and sales, as well as those referring to the macroeconomic environment.

In terms of production, during July companies with production drop over those with increases: it was the fourth consecutive survey with this trend.

The survey identified that 36% of companies registered a drop in production, while only 21% of them indicated an increase.

The situation is reverse to that of the same period last year, where a 23% of companies had reduced production and 32% had increased it.

Industry: in which sectors they recorded the greatest falls

When analyzed by industry subsector, the falls predominated in almost all branchesexcept for the automotive sector and the base metals industry, which were the sectors that drove the industry upward in the first semester, detailed the UIA.

Regarding sales to the domestic market, they showed a similar trend to production, with a predominance of companies with falls (45%) in the sales compared to those that showed increases (21%).

Industry: employment, the only positive data

Employmentfor its part, was the only indicator with a more favorable performance; On this occasion, it was observed that companies with increases in jobs (15%) outnumbered those with declines (14%).

When analyzing the data by sector, the job rises correspond to certain specific companies that had investment projects with expansion of productive capacity, beyond the current economic situation.

For example, in branches such as textiles, clothing and footwear, the chemical industry, the non-metallic minerals industry, the survey showed.

In the case of the small and medium industries (which represented 95% of the sample) a situation similar to that of the general framework was observed, with deterioration of the indicators.

Thus, during July the companies with falls above those with increases in all indicators.

But with employment, unlike the total sample, in SMEs there were more companies with falls (15%) than rises (14%).

Industry employment.jpg

Foreign trade: how was the performance of the industry

In the case of the exports37% of companies registered falls in their external sales compared to only 13% with increases, according to the survey.

Regarding the restrictions on imports of goods, the survey found that 71% of companies indicated difficulties in approving applications (up from 58% in April).

Meanwhile, the times from toSIRA testing got worse for him 80% of companieswhile 77% indicated greater difficulties in paying suppliers.

In the same sense, growing difficulties were noted in the management of the import of services: 87% had difficulties with approval times and 84% with application approval.

With payments, only 20% of companies said they were able to pay for services without problems after waiting 60 days.

Industry: the situation of the sector and expectations

On exchange rate situationthe work of the UIA indicated that after decree 377/2023 that established the COUNTRY tax of 7.5% for imports of goods, the vast majority of companies estimated a high transfer to prices of both inputs and goods finals.

The business entity He clarified that the survey was carried out prior to the exchange rate jump on August 14, so the additional impact of the devaluation is not contemplated.

In this framework, the UIA warned that in an environment of deteriorating indicators, companies considered that the economic situation is worse than a year ago.

“This is seen both in the perceptions about the company itself (approximately 50% say it is worse than a year ago), as well as in those in the activity sector (64% indicated it is worse) and more especially in those in the economic situation of the country (92% indicated that it is worse)”, said the manufacturing plant.

And he added that although in the short term there is a deterioration of conditions For the industry, “in the future there is some improvement in the prospects for next year.”

Source: Ambito

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