In the grip of a persistent downturn, Argentina’s industrial sector reported a significant contraction of 6.8% this February.
This marked a continuing decline stretching over nine months, as noted by the Argentine Industrial Union (UIA), the sector’s national representative.
The first two months alone saw an overall drop of 8.3%, with early indicators from March hinting at an even steeper fall.
The UIA pointed to numerous challenges throttling the industry, including escalating energy costs and pricey imported inputs.
There was also a noticeable slump in demand from households, other industries, and construction, all combining to dampen the sector’s output.
March is expected to bring more woes, worsening the year-on-year downturn.
Notably, the automotive sector reeled under a steep 29.4% plunge due to slumping sales both at home and abroad.
February’s analysis revealed the sharpest drops were in the non-metallic minerals and automotive sectors, contracting by 24.8% and 19%, respectively.
This was primarily due to faltering construction activity and dwindling vehicle sales.
Other areas also faced setbacks. Metal-mechanics fell by 13.5%, chemical products by 4.4%, and basic metals by 1.8%, the last hurt by a dip in steel output.
However, not all news was gloomy. The food and beverages sector saw a modest uptick of 1.8%, buoyed by a rebound in the oilseed complex.
Without this sector, the figures would have depicted a sharper contraction of 4.6%.
Additionally, the paper and cardboard sector grew by 3.5%, and petroleum refining edged up by 0.9%.
The agro-industrial segment provided a silver lining, boosting the nation’s foreign currency reserves.
February saw soybean processing jump 51.5%, sunflower milling rise 27.7%, and wheat flour production increase 2.4%, injecting positivity into a tough economic environment..
Background
While industry is still struggling, Argentina heralded a new era of economic stability in early 2024, achieving a fiscal surplus of 0.2 percent of its GDP.
For three consecutive months, including March, the nation maintained a financial surplus, a feat last accomplished sixteen years ago.
March alone saw a financial gain of 276.638 billion pesos ($317 million), even after settling debt interest payments amounting to 348.396 billion pesos ($399 million).