The recession advances: metals activity fell 13.8% year-on-year in the first two months

Amid the recession, metallurgical activity slowed 13.8% in the first two months of 2024 compared to the same period last year. On an intermonthly basis, activity fell by -2.5% compared to January and thus accumulates a decline of -4.4% during the year, according to the report of the Department of Economic Studies of the Association of Metallurgical Industrialists of the Republic Argentina (ADIMRA). .

At an industry level, The interannual decline for January and February occurred in all areas which make up the metallurgical framework with drops exceeding 15% in various cases.

The decline in the sector recorded in recent months is the worst in the last eight years, surpassed only by the pandemic period, in mid-2020.

In this sense, the three items that have fallen the most in recent months have been Agricultural Machinery (-19.5%), Capital Goods (-11.3%) and Medical Equipment (-22.9%). This was followed by declines in electrical equipment (-10.4%), auto parts (-10.7%), foundry (-11.0%) and other metal products (-16.9%).

In the context of the decline in the sector and internal demand, the president of ADIMRA, Elio Del Re, underlined that it is necessary “promote investments but with the aim of encouraging the development of the national industry. We must avoid emergencies and sectoral pressures favoring the importation of locally produced equipment, generating an enclave structure. In this sense, the Large Investment Regime presented in the draft Basic Law has not strengthened Argentine production.”

Installed capacity utilization (UCI) was 44.7% in January and 45.4% in February, which means a drop of almost 10 percentage points in average resource use in 2023.

The province that fell the most was Santa Feresult of the high influence that the agricultural machinery sector has in the province.

“Despite the general decline, There are sectors that have moderated the average sector decline, with the exception of metallurgical goods related to the oil and gas supply chain, which recorded a slight increase on an annual basis. However, the majority was also negative,” the report reads.