He Industrial Performance Monitor (MDI index) of the Argentine Industrial Union (UIA)which anticipates the sector’s activity cycle, stood at 43.3 points. For the ninth consecutive month, in July it was below 50 points, which implies a situation of contraction.although it is far from the lows reached in January of this year.
The indicator weights the results of production, sales, employment, delivery times and input stock levels and 38.9% of the surveyed companies reported decreases in production, 43.7% in sales, 28.2% in exports and 17.3% in employment. In all cases, these percentages were lower than those of the previous survey.
38.9% showed declines in production, against a drop of 35.9% in July 2023while 23.1% had increases and the decrease predominated in nine of the 12 sectors surveyed.
The use of installed capacity and sales fell sharply
As regards the use of The installed capacity of the companies was an average of 58 And for 69% of companies, utilization was lower than what was considered optimal. Among them, 55.7% expect to recover these levels only in the second half of 2025 or later.
43.7% had a drop in sales to the domestic market (vs 44.9% in July 2023) and the percentage of companies with a drop in exports (28.2%) was lower than that of the domestic market: the diffusion index stood at -18.6 p.p. and -13.5 p.p. for domestic and foreign sales, respectively.
The Falling demand from other industries was the main concern for 29.5% of companiesfollowed by cost increases, which affected 29.0% of them. Among these, labor costs stood out as the most relevant, with 31%. Meanwhile, the increase in energy costs was the concern for 16.7% of the companies surveyed.
The results emerge from a survey of almost 1,200 companies during the first half of August. Ten of the twelve sectors had an MDI below 50after four consecutive surveys in which all sectors showed an MDI below 50. Only the Non-metallic minerals and other industries segments were above that level. In contrast, the lowest MDIs were in Apparel, leather and footwear, and Publishing and printing.
Job creation in the industry is falling
Although stability prevailed, 17% of companies had declines in job creationFor the fourth consecutive survey, more companies are reducing their employment level than those increasing it. The diffusion index stood at -7 pp. After reaching the minimum of the series in the previous survey, for July, it is at levels higher than those of January 2023. In addition to staff reductions, companies reduced work shifts.
46.7% of the companies surveyed had difficulties in meeting at least one of the following payments:: salaries, suppliers, financial commitments, utility rates, taxes. This percentage decreases compared to the last two surveys, but is above the values of July 2023.
Decreased the percentage of companies to meet all payments to 4.4%. The difficulties were greatest in the payment of taxes (29.8%) and suppliers (21.7%). In the case of SMEs, 47.6% of companies had problems with at least one of the payments, and 4.6% with all of them.
The expectations of companies going forward
Forwards, Companies perceive a worse situation than a year agoboth at the company level (52.3%) and at the sector level (69.4%) and at the national level (60.6%), although with a slight improvement compared to the previous survey. When comparing these data with the expectations for this year, it is clear that they were not met: 40.2% of companies expected an economic improvement in the country by 2024, but 60.6% now see a worse situation; similarly, 42.4% anticipated improvements in their sector, but 69.4% say that it has worsened.
Despite this, they remain optimistic for the coming year: 62.9% expect an improvement in their business economic situation, 62.2% in their sector and 67.0% in the country. Companies are concerned about the new challenges of the current context. The fall in demand from other industries was the main concern for 29.5% of companies. There is also concern about rising costs, which affects 29.0% of companies.
Inside the companies that indicated the cost increase as their greatest concern, it was observed that the main cost that affects is the salary (29.1%). Rising energy costs were a concern for 20.1% of the companies surveyed.
The average of The use of the installed capacity of companies was 58.0%. For 69.0% of companies, this utilization was below the level considered optimal. Of these companies, 55.6% expect to recover these levels in the second half of 2025 or later.
In this context, 47.7% of companies consider that it is a good time to invest in machinery and equipmentAlso, the number of companies that think it is a good time to invest in working capital and capital goods increased (39.5% and 42.3%, respectively).
Source: Ambito
