Industrial activity will decline by at least 4% in 2024 due to the lower performance of the sectors linked to internal consumption and public works, according to the projections of the Study Center (CEU) of the Argentine Industrial Union (UIA). According to the producing entity’s report, 2023 ended with a change close to zero (0.3%)therefore “the recovery process that the sector had in 2021 and 2022 after the pandemic and the macroeconomic crisis of the years 2018-2019-2020” was interrupted.
According to the UIA, the industry grew in three of the previous government’s four years. It only fell in 2020 of the pandemic.
In 2023 it grows DESPITE that in December, already with Milei, it collapsed by 8.3%.
Let’s save it to see what will happen to industry and employment in the months and years to come. pic.twitter.com/Q4u1RRFAHd— Vasco de Mendiguren (@dmvasco) February 28, 2024
In December, factory activity fell 8.3% year-on-year and 6.4% monthly without seasonality.
The former Minister of Industry, José Ignacio “Vasco” De Mendigurenwrote on Twitter that “according to the UIA, The industry grew in three of the previous government’s four years. It only fell in 2020 of the pandemic. In 2023 it grew despite the fact that in December, already with Milei, it had fallen by 8.3%. Let’s save it to see what happens to industry and jobs in the months and years to come.”
The publication was replicated by former president Alberto Fernández upon his return to social networks to highlight positive macroeconomic data from his management.
Neither De Mendiguren nor Fernández, however, commented on last week’s INDEC data on the performance of the economy in 2023: GDP fell on average by 1.6% and between 2019 and 2023 GDP per capita fell by more than 1%.
Company expectations
Looking at the first month of this year, advance data from the UIA showed underperformance from the sector, with worsening declines in several sectors.
“Similarly, from the survey of more than 700 companies, the data obtained in the UIA Survey I 2024 reflects this lower industrial performance. A predominance of companies with declines in production levels, domestic sales, exports and of the occupation,” the entity noted.
The rest of the year will continue with a similar trend. The prospects are therefore those of a decline in production, the extent of which will depend on the evolution of the main macroeconomic variables.
In the document, the UIA specifies that by 2024 “the baseline scenario foresees a decline in industrial activity of at least -4% on an annual basis, which is explained by the lower performance of the sectors linked to domestic consumption and public works and the lack of export incentives.”
At the same time, the cost impact of increased rates, increased PAIS and lack of financing instruments is expected. This trend would be partially offset by the recovery of sectors related to agri-food, oil and mining. sector.” he added.
Source: Clarin
