The manufacturing industry recorded its third consecutive monthly advance in September and seems to be slowly overcoming the deep crisis that it went through in the first months of the La Libertad Avanza Government. Thus, The loss of the sector compared to November 2023, prior to the arrival of Javier Milei to Casa Rosada, was reduced to 1.4%.
The data of the Manufacturing Industrial Production Index (IPI)published this Thursday by INDEC, exhibited a 2.6% improvement compared to August. In the previous two months, there had also been increases, which is why the seasonally adjusted series showed its highest level in the Milei era.
Clara Alesinaeconomist at the Freedom and Progress Foundation, He highlighted to this medium that the expansion in the third quarter was 8% versus the previous quarter, which meant the first positive variation since the first quarter of 2023 and could drive the first quarterly improvement in general economic activity for the new management.
With a somewhat more cautious look, Agostina Monti Salíasspecialist in Productive Development, maintained that the dynamics that the industry has been showing accounts more for a “rebound” than for a “recovery”since 13 of the 16 sectors measured by INDEC are in decline compared to the same month of the previous year.
In year-on-year terms, a drop of 6.1% was observedlower than that of August but higher than that seen in July.
Which industrial sectors have already recovered and which are still far from raising their heads
Compared to September 2023, the industrial items that had the most impact on the decline were chemical substances and products (-8.9% yoy), non-metallic mineral products (-19.4%) and machinery and equipment (-16.1%)also highlighting a fall of 14.4% in basic metal industries.
Regarding the first division of those mentioned, representatives of the sector explained that the activity in the month in question was affected by technical problems in some production lines and plant stops programmed in the segment of plastic raw materials and synthetic rubber, as well as the lower domestic demand in general terms and some problems accessing imported inputs for the agrochemicals segment.
In non-metallic minerals, the collapse was closely linked to the construction performancewhich sharply stopped the demand for products such as cement. According to data from INDEC itself, construction activity, measured by the synthetic indicator of construction activity (ISAC), registers a year-on-year decrease of 24.8%.
Within machinery and equipment, the main factor of the decline was tied to the decline in the manufacturing of agricultural machinerywhile in basic metal industries the steel industry contributed the greatest negative impact, due in part to a lower consumption of inputs by the automotive and construction industries.
At the other extreme, only three industrial sectors that are better than 12 months ago. Such are the cases of the category of food and drinks, oil refiningand “other industries” (which includes the manufacture of furniture and mattresses).
“When you see the three sectors that are above September of last year, you see that food rose 7% but the other two do not even reach 1% of the growth, so I don’t know if we could talk about growth. Furthermore, if It is true that in this second part of the year the falls in most areas are not so great, What happened in the first semester was quite similar to what happened in 2001according to the words of the industrialists, not mine,” Monti clarified.
Regarding the factors that drove the improvement compared to the previous months, the political scientist highlighted the inflationary slowdownwith particular impact in the case of food.
What is the accumulated fall of the industry in 2024 and what is expected for the remainder of the year
With these numbers, Industrial production accumulates a deterioration of 12.7% in 2024. Although this is a considerably high number, there was a slight rebound compared to the previous month, which had been 13.6%.
Looking to the future, Industry expectations improved: 39% believe that the use of installed capacity will grow and 32% expect it to go down (vs. 30% and 38% respectively last month). “The expectation now focuses on the consolidation of this trend for the last months of the year, for which it will be necessary to continue lowering the inflation tax, eliminate distorting taxes, and regulations that slow down activity, including exchange regulations. Something to which the scenario seems to become favorable, given that the official-parallel gap fell again,” said Alesina.
For its part, from the LCG consulting They highlighted that, to project the October data, “there are still many numbers of industrial activity missing, although consumption indicators were almost all positive and there is usually a correlation between both variables.”
Source: Ambito
