In January, Argentina’s small and medium-sized enterprises (SMEs) saw a sharp 30 percent fall from last year.
The main reasons were less spending by consumers and rising inflation. The Argentine Confederation of Medium Enterprises (CAME) shared this. CAME speaks for over 400,000 SMEs nationwide.
CAME pointed out a worrying pattern. Manufacturing production has been shrinking for two months in a row. This shows how less buying power is affecting businesses deeply.
“The industrial sector is feeling the pinch from less money in people’s pockets and losing ground in global markets.
This hits companies that sell abroad hard. Also, cutting production takes time because it involves decisions on spending, jobs, and more,” said CAME.
The biggest drops were in paper and printing (41.7 percent), chemicals and plastics (35.6 percent), and metals, machinery, and transport (34.8 percent).
The wood and furniture sector also went down by 30.6 percent, food and beverages by 22 percent, and textiles and clothing by 18.2 percent.
In the food sector, CAME found less investment, rising prices, delays in shipping products, and job cuts due to slow business.
“The sector worries about fewer exports and losing markets,” CAME added.
From December to January, SME activity fell by 9.1 percent. December had already seen a 31.7 percent drop.
Given these numbers, CAME says SMEs are getting ready for tough times ahead.
“Several issues threaten industrial profit. These include less spending because people have less money, ongoing inflation, and expected rises in public service costs like electricity.
This creates uncertainty and risk for industrial work,” CAME explained.