This is the fourteenth consecutive monthly decline recorded by the market’s leading research centre. Production is expected to remain low in the coming months.
The Industrial activity registered a fall of 11.2% in June compared to the same month last year, according to estimates by the Orlando Ferreres Center for Economic Studies. The consultancy firm indicated that this is the fourteenth consecutive month of decline in the indicator.
“Compared to the same month last year the industry fell by 11.2%, suggesting that, contrary to what happens with activity in general, in the manufacturing sector The contraction has not yet found a bottomeven though it has already been 14 consecutive months of negative numbers“the think tank said in a report.
It should be remembered that according to data from the National Institute of Statistics and Census (INDEC), in May there was an increase in economic activity of 2.3% compared to the same month last year, and an improvement of 1.3% compared to April, which would suggest that in the fifth month the recession had reached its lowest point. However, this was mainly due to the 103% increase in activity in the agricultural sector. Industry continues to decline.
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The Industrial Production Index (IPI) prepared by the study center indicates that in June there was also a a 0.4% drop compared to May, with a cumulative total for the first half of the year of 9.7%.
“Among the sectors, the strongest annual declines were in machinery and equipment, non-metallic mineralsand basic metals. It is worth mentioning that production in the sixth month was influenced by circumstantial factors, such as a labor conflict involving tire workers, and industrial shutdowns during the week that had three holidays, particularly in several automotive terminals, which decided to stop for the entire week due to low demand,” the report says.
The study adds that “in In seasonally adjusted terms, the second quarter of the year shows a contraction of 1.5% compared to the first quarter.”
“Forward We expect a period of stagnation close to the current low levels, which would then lead to a gradual recovery when the recomposition of family incomes causes an improvement in domestic demand,” the report analyses.
How each industry segment fared
- Food, Beverages and Tobacco: The sector recorded an annual growth of 9.4%, accumulating an increase of 8.7% for the first half of the year. The annual increase is explained by oilseed production (+29.6%), which more than offset the decline in the rest of the sectors.
- Machinery and equipment: Machinery and equipment production registered the sharpest decline since May 2020, recording a 35% decrease, and accumulating a 26% drop for the first half of the year. In the detail of automotive production, ADEFA reported a total of 32,029 new units, marking a 40.2% drop in the annual comparison.
- Base metals: The production of basic metals showed a 33.2% annual contraction, accumulating a decrease of 27.6% for the first six months. Among the main lines, the decreases in hot rolled products (-43.5%), crude steel (-35%) and cold finished rolled products (-29%) stand out.
- Non-metallic minerals: The sector that supplies construction inputs registered a 32.7% contraction in June compared to the previous year, accumulating a loss of 30.9% for the first half of the year. In detail, the Portland Cement Manufacturers Association reported a 32.8% drop in the production of this input for the sixth month.
Source: Ambito
