Argentina’s industrial activity grows by 13.8% year-on-year in August

RIO DE JANEIRO, BRAZIL – Argentina’s industrial activity registered a year-on-year growth of 13.8% last August, the National Institute of Statistics and Censuses (Indec) reported on Thursday.

Year-on-year improvements were observed in the eighth month of the year in 14 of the 16 industrial sectors included in the indicator.

The industrial branches that recorded the most striking recovery were the automotive industry (34.8%), iron and steel industry (29%), production of construction materials (15.4%), oil refining (13.7%), and food and beverage production (7.1%). On the other hand, furniture (-13.6%) and tobacco (-2.5%) showed setbacks.

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According to official data, industrial production in August showed a decrease of 0.6% concerning the levels of last July, making a chain of two months in decline.

According to a report by the Latin American Economic Research Foundation (FIEL), “industry continues to show improvements in the inter-annual comparison, while with respect to previous months a greater instability is observed,” alternating “monthly advances and setbacks since April” and cutting “the accumulated improvement concerning the beginning of the pandemic”.

“The cyclical recovery phase of the industry is no longer the most dynamic,” FIEL observed.

According to official data, in the first eight months of the year, Argentine industrial production increased 19.9% over 2019. Amid a severe economic recession in Argentina – aggravated by the covid-19 pandemic – local industrial activity fell by 7.6% in 2020.

For 2021, in general, private consultants expect a recovery by industry, although with an uncertain evolution ahead.

According to FIEL’s report, the recent measures adopted by the government to encourage consumption would have an impact on non-durable goods, such as food. In contrast, “the production of durable goods could receive some additional boost from its role as a store of value in the face of the deterioration of the Argentine peso.”

FIEL also pointed out that “further restrictions” on the exchange rate “cannot be ruled out, which could hinder the recovery dynamics.”