Thursday, February 23, 2023 | 4:15 p.m.
The industry closed 2022 with an increase of 6.5% compared to 2021, in what constituted the second consecutive year of improvement, after the sharp drop in the 2018-2020 triennium, according to what was reported today by the Argentine Industrial Union ( UIA).
“Production managed to exceed the levels of 2017 (+3.6%) and was slightly below those registered in 2015 (-2%),” highlighted the manufacturing center, which nevertheless pointed out that the activity “is still far from the maximum level reached in 2011, 16.4% below”.
“The lower dynamism of the activity is also beginning to have an impact (construction, drought in agriculture, among others), the rise in the cost of financing and difficulties derived from the restrictions on access to imported inputs,” warned the UIA.
The entity reported that last year “at the international level, Russia’s invasion of Ukraine implied lower global growth, a general increase in costs and world inflation, and an acceleration of contractive monetary policies with higher international interest rates.” .
Regarding the local scenario, he indicated that “exchange and financial tensions of previous years were maintained and intensified”, and that although the agreement with the IMF “allowed refinancing external maturities with the organization and provided some predictability, at the same time implied goals in terms of accumulation of international reserves that, in a context of lower trade balance due to the rise in international prices and a high exchange rate gap, led to increasing difficulties in accessing foreign currency for production”.
In this sense, he specified that the Import System of the Argentine Republic (SIRA) “showed difficulties in its operation for industrial companies”, and that “more than 80% of the companies indicated that the deadlines for approval of applications with the new system were longer than with the previous system, which made it more expensive and limited the supply of key inputs for industrial activity”.
The UIA stressed that “consumption during the first half of the year showed a slight recovery, largely as a result of increases in wages and income reinforcements for retirees, monotributistas and holders of social plans, which allowed maintaining the power of purchase despite accelerating inflation.
All the sectors that make up the Industrial Production Index prepared by the UIA registered year-on-year increases during the year, although they were lower than those of 2021, in which there was strong growth after the impact of the pandemic in 2020.
Among the sectors that most boosted growth during the year are Automotive, which reached its highest levels since 2014; followed by Basic Metals, the Metal-Mechanical Industry and Oil Refining.
Likewise, some sectors such as Paper and Cardboard and Non-metallic Minerals, although they registered a good performance during the first half of the year, began to slow down towards the second semester.
The manufacturing center noted in its report that 2023 “began with a good level of activity from the previous year, but with a low statistical drag and a visible slowdown in production.”
“Given the election year and the macroeconomic challenges ahead, the focus of the situation will continue to be on the exchange rate gap, international reserves and import controls, which will condition the dynamics of activity,” he concluded.
