He Ceres Leading Index (ILC) fell 0.1% in July and scored his third straight setback in a negative signal that sets off the alarms about the future of the economic activity that marked the beginning of the contractive phase.
From Ceres assured that, with a third consecutive negative rate, it indicated the beginning of a contractive phase, after a beginning of the year that registered an increase in activity, “the economy faced difficulties to consolidate sustained growth”.
In this sense, the main problems were the impact of the drought, The problems of competitiveness that affect exports and exchange difference between Uruguay and Argentina, that is felt above all on the coast. This determined that, after five months of increased economic activity, a process of resentment began in the second quarter of the year.
On the other hand, the completion of the construction of the UPM second plantthe lower dynamism in employment due to the central railway and the shutdown of the refinery ancap since September and for several months. These realities represent even more pressure for the Uruguayan economy, which explains why an annual growth of around 1% is projected.
For his part, he Diffusion Index (ID) August, which takes into account the proportion of variables with positive rates, was 50% last month, which represents an increase if compared to the previous month, when the ID was 40% In any case, from Ceres they considered that it is a negative sign, since the variables with a positive result did not reach half of the components.
Factors that push economic growth
Despite the bad news, since Ceres They assure that there are factors that push the economy to improve. One of them is the historical maximum that was reached regarding the number of employees, reaching a total of 1,712,700, according to data from the National Statistics Institute (INE). This represents nearly 64,800 more than in July 2022 and approximately 115,000 more than the 2019 average.
He real salary, for its part, it exceeds pre-pandemic levels with an increase in July of 4% year-on-year. In this sense, “household income, which adds income such as liabilities, profits, rents and others to salary, showed an increase in real terms in the second quarter of the year of magnitude even greater than the average salary.”
On the other hand, referring to the construction sector, it is expected that they will offset “the decline in employment in the construction sector and related industries – due to the completion of the construction of UPM II – and the start-up of the pulp mill in the center of the country will boost production”.
In turn, the largest negative effects caused by the drought They have already passed and an improvement in external demand is expected in the coming months. In this sense, the exports of come in August fell 17% year-on-year, mainly affected by the soy.
According to Ceres, a higher growth rate is expected by 2024, marked by the cessation of some negative pressures and “exports and Industrial production They will also have the impulse of the full operation of UPM II and the realization of others investments”.
Source: Ambito
