The manufacturing sector, a key barometer of the country's economic health, registered a contraction of 5.4% compared with the same month last year, deepening the negative trend seen in previous months.
The Argentine economy continues to face significant challenges, as evidenced by the latest report from the National Institute of Statistics and Census (INDEC) on the manufacturing industrial production index (IPI manufacturing) for July 2024, which was published this afternoon.
The manufacturing sector, a key barometer of the country's economic health, registered a contraction of 5.4% compared with the same month last year, deepening the negative trend seen in previous months.
The outlook becomes even more bleak when considering the cumulative total for the first seven months of the year, which shows a 14.6% drop compared to the same period in 2023. This figure underlines the magnitude of the obstacles facing the Argentine industry in its quest for recovery and sustainable growth.
Despite this negative overall picture, the report reveals some data that could be interpreted as signs of an incipient stabilisation. The seasonally adjusted index rose by 6.9% compared to the previous month, while the trend-cycle index showed a slight increase of 0.6%. These data suggest that, although industry is still in contraction, the speed of the decline may be slowing.
A sector analysis reveals that most industrial divisions experienced declines. The most affected sectors include "Wood, paper, publishing and printing" and "Non-metallic mineral products", both with a negative impact of 1.4% on the overall index. They are followed by "Rubber and plastic products" (-0.9%), "Basic metal industries" (-0.7%), and "Furniture and mattresses, and other manufacturing industries" (-0.7%).
The wood and paper industry was particularly hard hit, with a year-on-year decline of 17.2%. Publishing and printing activity contracted by 18.5%, while production of paper and paper products decreased by 19.3%. These declines are mainly attributed to lower demand for packaging from various sectors, including the food and construction sectors.
The non-metallic mineral products sector also suffered a severe blow, with a 25.4% drop. The production of non-refractory clay and ceramic products plummeted by 48.7%, while the production of cement and plaster products fell by 25.7%. These figures reflect the difficult situation of the construction sector, which, according to the synthetic indicator of construction activity (ISAC), experienced a contraction of 20.4% in July.
The automotive industry, another traditional pillar of the Argentine economy, did not escape the negative trend. The production of motor vehicles fell by 8.5% year-on-year in July. According to data from the Association of Motor Vehicle Manufacturers (ADEFA), domestic sales of national cars and utility vehicles fell by 24.7% in July, accumulating a fall of 36.3% in the first seven months of the year.
However, it was not all bad news. The food and beverage sector recorded a 6.2% year-on-year increase in July, driven mainly by oilseed crushing, which grew by 60.3%. Soybean oil and by-product production increased by 72.6% in July and by 35.2% in the January-July 2024 period, benefiting from an improvement in the soybean harvest following the drought of the previous year.
The wine industry also showed positive signs, with wine production up 17.1%. Wine exports, measured in hectolitres, grew 41.8% year-on-year in July, while shipments to the domestic market rose 6.9%.
Poultry meat production was another bright spot, up 13.6% year-on-year in July. Domestic consumption of poultry meat grew 13.9%, while exports rose 12.8% in volume terms.
Economic recovery remains a challenge, but some of the data suggests that some sectors may be finding ways to adapt and grow in a complex economic environment.
