The UIA warns that exchange rate tensions are impacting activity

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In March industrial activity recorded an increase of 4.1% both in the annual comparison as if it were measured with respect to February of 2.8%, according to the report produced by the study center of the Industrial Union.

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But already March seems far away. And the industrialists themselves warn in the report that “ it is not excluded that tensions on exchange rates since the end of April have an impact on the business, especially since difficulty in supplying productive factors and increase in costs and in the monetary policy rate. Meanwhile, the drought’s impact on milling and chained industrial sectors will continue. and the first time that industrialists warn that exchange rate volatility affects business.

This underlines that they could “partially offset this situation with measures aimed at supporting consumption and the demand for durable goods.

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What contrasted with that average growth was what happened with food production that it fell by 3.6%. It is attributed to drought and lack of grains to grind.

Same thing for the non-metallic minerals category with a drop of almost 4%, albeit with uneven trends: cement shipments register a year-over-year increase while the construction index marks the sale of building materials marked a 12% decline.

As far as March photography is concerned, at sector level, while continuing the positive trend, there is disparity in the performance of the sectors. The 4.1% increase that month was explained by the growth of up to 25% in sectors linked to the consumption of durable goods such as automotive and also petroleum refining associated with good performance in the hydrocarbon sector.

Meanwhile, they have been watched falls up to -4% in activities related to the lower dynamism of construction (non-metallic minerals) and in particular with the impact of drought, among which there are food and beverages (grinding), chemical substances and products (biodiesel and agropharmaceuticals) and agricultural machinery.

The sectors that continue with good dynamism are the Automotive, up by +25.4% with the production of 61,104 units (although still -20% below the maximum production of March 2013). The sector was driven by both domestic sales and exports. The Electronics sector is also growing, registering an increase of +37.4%, mainly driven by the production of mobile phones.

Here’s what happened with other industrial businesses:

  • Oil refining it grew by almost 15% driven by the production of petrol and diesel.
  • base metals saw an increase of 7% due to aluminum production, even though steel production recorded an increase of less than 1.8%.
  • Paper and cardboard grew by only 1.2% and the engineering industry recorded an increase of 1.1%.

With these data the first quarter closed with an annual increase of 5%, partly due to the low basis of comparison due to the third wave of covid in 2022. The anticipated numbers for the month of April that the UIA report shows show aa “heterogeneous situation with declines in agricultural machinery and construction”.

Source: Clarin

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