Boosted by auto and metal-mechanic manufacturing industrial production in Argentina during June increased 3.8% compared to the same month a year ago, according to the latest release from Indec. Since April and May were also positive this means that the second quarter was up 3.5% over a year ago.
However it is more of a recovery than expansion, since in the second quarter of last year, according to Indec, industrial production had contracted 3.2%. Likewise in the first half of this year industrial production was up 1.1% over 2012, but last year, again according to official stats, that period suffered a loss of 0.6%.
The recovery of manufacturing in Argentina during the first half of the year has not been homogeneous, and in effect very few sectors have positive performances.
The outstanding sector has been auto manufacturing which climbed 19.8% in June and 19.2% in the six months. In the first half of last year because of trade disputes with Brazil, exports plunged and the sector contracted 14.2%.
Furthermore with strict foreign currency controls and few options to invest, Argentines have been purchasing new models, which still have not suffered the full impact of the ‘blue’ or parallel dollar in their manufacturing cots.
Non metallic minerals such as glass, cement and other construction materials increased in the first half of this year, an estimated 5.2% which means the sector gradually wants to recover.
Chemical and substances production was the third positive sector in the first half, 2.6%, despite a drop of 3.6% in June. All other manufacturing sectors contracted in the first half compared to the first six months of 2012.
Given its significance for manufacturing, the most serious fall was in food and beverage, with a 1.6% contraction in the first half. Only sugar and deli shops showed growth, 6.6%, while the rest were stagnant or declining. The worst of all was the dairy products, down 7.9%.
Another indicative sector, basic metals was down 8.9% in June and 8.1% in the first six months, mainly because of less steel production, as a consequence of programmed stoppages in some foundries forced by lack of imported inputs.
Textiles was down 1% in June, 4.7% in the first half of 2013 while the metal mechanic industry (excluding auto manufacturing) was up 8.7% in June, because of an overall increase in demand, but is down 2.1% in the first half.
Estimates from private consultants say manufacturing in the first half of this year was only 0.3%, below the Indec figure, but in June it was up 3.4% over a year ago. However most of the increase can be explained because June 2012 ‘was not a demanding month’.