the worst record in the last 17 years


In the first four-month period of 2020, an 11.5% drop in manufacturing production was accumulated, compared to the same period of the previous year

Industrial activity fell 30.6% year-on-year in April, and the level of production was the lowest since 2003 as a result of the quarantine, reported this Monday the Argentine Industrial Union (UIA).

With only 43% of formal industrial employment authorized to work in April, industrial activity registered a drop of 17.1% compared to March, the month in which social isolation began.

The UIA warned that this is the sharpest drop in the series – which begins in 1994 – and the production level was the lowest since April 2003.

Thus, in the first four-month period of 2020, an 11.5% drop in manufacturing production was accumulated, compared to the same period of the previous year.

Blow to the automotive industry

According to the factory, the performance of April was explained by the contraction of practically all sectors. The Automotive industry, which did not record production.

Those items considered “essential” during the quarantine – such as food and beverages and the production of substances and chemicals, including the pharmaceutical sector – were the only ones to present more moderate falls and even slight year-on-year increases in their activity levels.

For example, the automotive sector was completely paralyzed, with a null production in April that implied a historical fall of 100%.

The textile sector, also very affected by the quarantine.

This was followed by the non-metallic minerals sector, including cement shipments, with a 67% year-on-year drop in its production levels, largely due to the lower level of construction activity.

Textile products contracted 57.8%, mainly due to falls in cotton yarn and fabrics and finishing of textile products.

In addition, the activity of the base metals industry registered a drop of 65.4%, with falls in subgroups that averaged up to 70%.

Oil refining fell 40%, while metal mechanics contracted 38.7%, mainly due to lower production of electrical equipment, auto parts and smelting.

Minimum use of installed capacity

The UIA indicated that the use of the installed capacity of the industry hit a record low, averaging 42% in April according to the INDEC: a year-on-year drop of 19.6 percentage points.

Utilization was even lower than the 48.2% registered in January 2002, the lowest figure so far.

The entity also indicated that the strong impact of the pandemic was also seen in external accounts: exports of manufactured goods of industrial origin (MOI) fell 58.3% year-on-year.

The steepest falls were registered in the footwear (99%), land transportation material (90.2%), and rubber and its manufactured items (77.8%).

Industry

Industrial exports also collapsed during the quarantine.

“Industrial exports face a complicated picture, not only due to the greater operational difficulties in the local market, but also due to the fall in activity in Brazil (a contraction of -6.5% is expected in 2020), the devaluation of the Real and excess production from other markets, “warned the UIA.

At the same time, it indicated that imports continue to fall as a result of less local activity: purchases of both consumer goods (-19.7%) and capital goods (-34.9%), parts and accessories ( -43.7%) and intermediate goods (-14.2%).

Although production in some industrial sectors and regions of the country was enabled during May, preliminary data anticipates a sharp drop in production, according to the Industrial Union.

In this sense, he pointed out that the consumption of electrical energy by large industrial users recovered in most sectors, although it is still 25% below pre-quarantine levels.

According to the latest UIA impact survey, only 17% of companies produce at the same level as before and 62% of companies have a drop in sales of more than 30%.

“Three months after the pandemic unleashed, economic and operational problems are accumulating and the prospects for companies are deteriorating,” warned the business entity.

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