Yellow lights: in April, the industry began to show signs of slowing

After the rebound in industrial activity on 15.8% in 2021, The industry is starting to show signs of slowing down. In the first quarter of 2022, the interannual increase in the Industrial Production Index (IPI) is 3.7% and in March there was a decrease of 1.9% compared to February.

Economist Fausto Spotorno suggests that “industry activity seems to be slowing down ” according to the Industrial Expectations Index (IEI) of the UADE. “This index allows us to observe the performance of the economy relatively early. IEI expects that in March activity will slow and for April it showed the same.”

UADE’s Institute of Economy (INECO) presents the Industrial Expectations Index (IEI) which describes the outlook of Argentina’s manufacturing industry for the next three months.

In April the indicator shows a value of 50.1, which represents a slightly lower value than in March.

The survey reflects that the industry’s expected production dropped 4.4% in April compared to March, while expected capacity utilization dropped by 2.4%. On the other hand, staff increased by 3.3% and hours worked by 3.2%. On average, the IEI dropped 0.1% in April compared to March.

50.1 index last month this is the lowest since April 2021, when it turned 49 amid rising pandemics. From that moment on it ascends with ups and downs and reached a high of 60.7 in Februaryon what is the highest record since October 2017.

pessimistic data

Private data reflects an industry shutdown in early March. According to the Industrial Production Index of the Ferreres y Asociados Study, in that month activity grew by 0.6% compared to the same month last year. For the first quarter, it accumulated an advance of 0.3%. For its part, the seasonally adjusted measurement registered a fall of 2.5% compared to February.

“March again brought negative numbers for the manufacturing industry on measurement without seasonality, showing the difficulties we will see in the rest of the year to surpass the level reached at the end of last year”, they indicated from Study of Ferreres.

In year-on-year comparison, the sectors that recovered the industry in March were oil milling and chemical industry, although positive results in the branches of non-metallic minerals, primary metals and machinery and equipment led to a slight increase of 0.6% in the third month of the year.

Regarding the prospects, “the acceleration of inflation, energy poverty and a tense political context, along with the worsening external front, don’t leave much room for optimism“, They said.

At the same time, other measurements show that activity is cooling. The EcoGo Economic Activity Estimator for March is down 0.7% compared to February and up 3.2% compared to last year. The biggest decline was the goods segment, with a decline of 1.1%, while services lost 0.5%and taxes, 0.2%.

“The fall of the month was associated with industry (-1.7%) and the mining sector (-3.2%)“, details Eco Go. Agriculture and construction did not show significant change, and public services rose 1.3%.

Within services, financial intermediation contracted 3.1% in March, while hotels and restaurants grew 2.7%.

AQ