Industry continues to plummet as sector drops again in July

In Argentina, the manufacturing industry continues to contract, with July's activity declining by 0.4%, according to research firm Orlando Ferreres & Asociados (OJF). This marks a significant acceleration in the decline, with industrial activity now 2% below the same period last year. The Argentine Industrial Union (UIA) reported a similar 0.6% monthly drop, with a year-over-year increase of 1.4%, attributed to the "low baseline."

The sharpest decline was observed in automotive production, which plummeted by 6.8%. Exports also took a hit, with the UIA noting a significant drop in exports to Brazil, Argentina's largest trading partner, which comprises nearly 40% of its manufactured goods.

Looking ahead, the consulting firm predicts the industry will remain split between sectors oriented towards foreign markets and those weakened by low domestic demand. An improvement in the struggling sectors is expected to depend on a recovery in retail consumption driven by increasing household income. However, this improvement does not seem to be happening yet.

According to the latest official data from INDEC for June, wages for private sector workers are 3.6% lower than in November 2023, the month before President Javier Milei took office. Even using labor ministry data, which uses a different methodology, wages are 0.6% below the levels of three years ago.

A report by the Argentine Center for Political Economy (CEPA) estimates that nearly 1,700 industrial companies have closed since Milei took office, making it the sixth-largest sector in terms of closures. However, in terms of job losses, the industrial sector ranks fourth, with 39,000 jobs lost. The top four sectors in terms of job losses are transportation and storage services (almost 55,000 jobs), construction (80,000 jobs), public administration, defense, and mandatory social security (98,000 jobs), and retail trade.