First data of the month show further declines in key sectors

First data of the month show further declines in key sectors
First data of the month show further declines in key sectors

The The first data on economic activity in June show the instability of the recovery which, far from the “V” that the Government hoped for and predicted, seems to have more of a “saw” or “Nike pipe” shape. While the manufacturing industry has not found a bottom and construction remains at very low historical levels, only some positive indicators are emerging in terms of consumer financing.

Two worrying indicators for the manufacturing and construction industries

On the one hand, the Association of Automotive Factories (ADEFA) reported that in the sixth month of the year Car production fell 16.7% monthlyfrom 38,440 units to 32,029 units. Likewise, in year-on-year terms, a 40.2% collapse was observed.

Although it was a month with an extra-long holiday, industry experts agree that even after adjusting for seasonality, the decline is still significant enough.

During the period in question Only two terminals produced every daysince many decided to stop their plants for the entire holiday week, with shift reductions and voluntary retirements.

The foreign market was also unable to support the automotive sector, as exports fell by 9.1% compared to May and 10.3% compared to June last year.

So far this year not only The drop in sales to Brazil was significant, which accounts for almost 70% of shipments abroad, but also the contraction in trade with other countries in the region, such as Chile, Peru and Colombia.

Another worrying fact from June was that cement shipmentswhich is closely tied to the dynamics of construction. According to the Portland Cement Manufacturers Association (AFCP), 725,580 tons were shipped last month, a 7.4% less than in May and 32.8% less than in June 2023.

The figures from the entity indicate that the sector is operating above the levels of February-March-April, but that it has not yet managed to get close to the previous situation, which was much better than the current one.

Fundar economist, Thomas Canosahe said in dialogue with Ambit that these data are not indicators to be ignored since “the automotive sector greatly drives steel and metallurgical production, and cement shipments are tied to construction,” which is why These are numbers linked to “sectors with weight in activity, in job creation and, in the case of the automotive industry, also in exports”.

For his part, the director of the consulting firm Analytica, Claudio Caprarulosaid these falls were foreseeable. “The fall in purchasing power and the adjustment in public works were of a magnitude that corresponds to these contractions”he sentenced.

The industry can’t find a footing

This Friday, INDEC reported that the manufacturing industry continued to struggle in May. The seasonally adjusted series registered its worst month since July 2020.

In year-on-year terms, the collapse was 14.8%. Among the most relevant industrial sectors, there were notable falls in basic metal industries, mainly due to the collapse in the steel industry, in non-metallic minerals, due to low activity in construction, and in machinery and equipment, due to decreases in the manufacture of agricultural machinery and household appliances.

According to surveys of businessmen in the sector, depression in lDomestic demand is the factor that most influences these catastrophic numbers. In addition, in some sectors there are problems with the supply of imported inputs.

Consumer credit is showing signs of recovery. Can it support domestic demand?

At the same time, the AFIP announced this week that Tax collection fell 14.3% year-on-year in real terms during June. Regarding taxes tied to economic activity, a significant drop in employer contributionsboth compared to June 2023 and compared to May of this year.

As regards trade and domestic demand, some signs of improvement can be highlighted. Firstly, Although VAT collection fell 13.1% compared to a year ago, a slight rebound was observed compared to May.

From the Build Group, which brings together 12 leading companies in the manufacture of construction supplies, They highlighted “the return of credit and 12 interest-free installments” as policies to stimulate demand. According to the group, this influenced the monthly improvement of almost 10% shown by the Construya Index in June, which measures the evolution of volumes sold to the private sector.

In the same vein, a report by the First Capital Group reported that credit card transactions grew for the third consecutive month, driven by “the return of installments”. Likewise, the survey also revealed the following: First real increase in mortgage lending in eight monthsfollowing the reappearance of the offer, mainly of “UVA” loans.

As for the credit for productionCanosa stressed that the data improved in April but remained 30% below the November 2023 figureThe economist said that the low interest rate has a positive influence on the reactivation of credit, but clarified that it will not be enough if companies do not see greater demand in the future.

About, Caprarulo believes that this improvement in credit will only contribute “marginally” to the recovery of economic activity and ruled out a “V”-shaped recovery, something that fewer and fewer people dare to project.

Source: Ambito

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