With the first quarter of the year coming to a close, The recession worsens in domestically based sectors. According to the data known so far, cars, food, steel and cement are among the sectors most affected by the decline in activity.
A CAME report shows that SMEs in the manufacturing industry in February it decreased by 9.9% compared to the same month last year in the valuation at constant prices, discounting the effect of inflation. It is the third consecutive month that industrial activity has fallen, although the rate has slowed after falling between 27% and 30% in December and January.
In food and drink The decline in production among SMEs was 14.6% in the first two monthswhile it reached 32% in chemicals.
“In February Input price increases in the sector have continued, but at the same time deliveries have normalized in the face of a somewhat more predictable economic situation.. Nonetheless, companies have reported damage due to increased costs, especially in the energy and transport sectors”, CAME specified.
The clothing sector, however, grew by 10.5% annually in February, although it recorded a decline of 2.4% compared to January. In the first two months of the year, a decline of 1.3% per year accumulates. “The start of the school year and sports activities have increased the demand from SMEs oriented towards this segment. Today the biggest concern of the sector is the possibility of an opening to imports, which would take many industries out of the market”, they stated by the entity.
In the chemical and plastic products sectoractivity contracted 23.1% annually in February. With this result, a decline of 31.2% accumulates in the first two months of the year. Companies importing inputs have indicated that despite the Bopreal issued by the national government, they continue to have problems repaying foreign debts, preventing them from purchasing inputs.
With 323,600 tons, lCrude steel production fell 20.6% in February from the previous month and 9.7% year-on-year. For its part, the decline in laminate production was even greater: 45.5% year-on-year and 38.6% compared to 2019. Last month.
“There are still no signs of demand recovery from the steel value chain, with the exception of the energy sector which continues to grow. Both construction and household appliances and packaging continue to decline, while the agricultural machinery sector has not yet recovered despite good prospects for the rough harvest,” they noted from the Argentine Chamber of Steel.
The construction sector continued its decline in February. Cement shipments showed a decline of 10.8% compared to last January and 23.4% on an annual basis.
For its part, the Construya index, which measures sales of building materials, from bricks to ceramics and taps, recorded a 26.6% year-on-year decline in Februaryalthough there was a rebound of 6.8% compared to January.
“In the second month of the year we observed a slight improvement in the sale of building materials, but we are still well below last year. Uncertainty about the near future is still very high and companies are anxiously awaiting the evolution of the economic plan,” explained Construya.
In this way the cumulative period from February to December closes 28% lower than the same period of the previous year. In the midst of this stalemate, The Argentine Chamber of Construction specifies that 100,000 workers have lost their jobs, largely due to the paralysis of public works.
The automotive sector recorded in February a decrease of 19.0% compared to the same month of the previous year and a decrease of 18.2% in the two-month period.
The only March data known so far leave no room for illusions: patents fell by 36.6% in March. 30% so far this yearin the midst of a crisis that has already led companies to suspend workers and terminate contracts.
Decline in consumption
In February, the Consumption Indicator (CI) of the Argentine Chamber of Commerce and Services (CAC) in the interannual comparison it decreased by 3.5%.while it had a seasonally adjusted increase of 1.5% compared to January.
“Just like in January, high inflation rates continued to impact people’s purchasing power, worsening the decline in consumption due to the real loss of purchasing power“, underline from the CAC.
Along with this they mention that “the cutting of appropriations, of subsidies in real terms, together with the adjustment of some parities below the inflationary rate, have negatively affected the consumption capacity of families, which was foreseeable in a fiscal adjustment framework, to reach the balance or fiscal surplus necessary to avoid monetary financing and consequent inflation.”
The segments that recorded the greatest loss in February they were recreation and transportationwith a decrease of 13.2% and 2.3% respectively.
As, The index accumulates a decline of 2.7% on an annual basis in the first two months of the year.
Source: Clarin
