Argentine SME Industrialists (IPA) warned that during the months of August and September the Factory output again showed signs of decline, in the face of a new decline in sales in the sector mass consumption, mainly causing “more uncertainty” for SMEs.
The latest report from the IPA Observatory indicated that in June there was a low in activity, with a rebound in July, although with the “danger” of installation of a “plateau” for the second semester.
“The market is flat. During the first week of August, demand began to fall again. and we are seeing this in the orders and the lack of production in the factories. We are not seeing a sustained upturn in mass consumption, so we could be facing a pronounced plateau in activity,” he said. Daniel RosatoIPA holder.
The IPA president ruled out a “reactivation”. He explained: “The new fall is due to the latest energy increases, with a market that gives negative signals, without reactivation, and that shows a new declineeven if it is slight. During July there was a positive expectation, due to the effect on consumption of the mid-year bonus, but in August and so far in September, sales again showed a decline.”
Rosato explained that “The rise in energy prices, both in gas and electricity, hit the purchasing power of workerswhich caused an increase in the inflation that households had to face.” “On the other hand, the Companies saw their costs rise, which resulted in price increases, in the least, and loss of profitability,” he said.
The IPA Observatory report, carried out by Pablo Bercovich and Martín Kalos, highlighted that “June appears to have marked a low point for economic activity.” “In June, construction began to rebound, while industry, trade, financial intermediation and several other sectors slowed their slump. It is likely that in July, now yes, a recovery will begin. generalized plateauing; with some rebounds that add to the three sectors in green (agriculture, oil & gas, mining) so that the EMAE on average marks an increase.”
SME industry: the latest data from CAME
The SME manufacturing activity fell 17.8% annually in July and has accumulated a decline of 18.6% in the seven months of the year compared to the same period in 2023. In the seasonally adjusted monthly comparison, production fell by 1.8%. SMEs worked at 60.6% of their installed capacity in July (In June, it had been 60.1%). According to the Argentine Confederation of Medium-sized Enterprises (CAME), 19.3% of small and medium-sized enterprises had difficulties paying salaries.
This is the eighth consecutive month of decline (counting December), in a market where prices have stabilized but the loss of purchasing power continues to affect domestic demand. This scenario is aggravated by the difficulties in the access to financing and high operating costswhich puts many SMEs in a difficult situation with narrow profit margins.
Source: Ambito
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