MercoPress. South Atlantic News Agency

Argentina industrial activity expands 8.9% in November

Industrial activity in Argentina kept steaming ahead in November reaching 8.9% compared to the same month a year ago and 0.4% over last October.

According to the latest release from the Statistics and Census Office, since January industrial production in Argentina advanced 7.7%. However the strong November expansion also showed that the use of production capacity actually dropped from 73.1 to 71.6%.

This has been interpreted as a direct consequence of increased capital investment to expand production as well as "technical" stoppages in several sectors.

Like in previous months the automobile industry recorded a 27.6% expansion in the last twelve months; the non metal industry linked to construction grew 14,5%; metal-mechanic industry, excluding automobiles, 7.2% and chemicals 8.9%. On the other hand tobacco contacted 6,7% and pulp and paper 0.7%.

The sustained showing of Argentine industry was also strongly supported by business expectations next year.

According to a poll from the Statistics and Census Office among business leaders, 51.5% estimate domestic demand will keep growing, with only 6.1% pessimistic, and 42.4% believing the situation will remain unchanged.

A majority of exporters, 50.5% forecast an increase in business; 10.1% a decrease and 39.6% no changes.

However this tendency becomes more conservative regarding Mercosur: 56.7% anticipate no changes; 36.7% more trade and 6.6% a decrease.

Based on these prospects, 24.2% of businessmen interviewed are planning to contract more personnel, but 75.8% will keep to the same numbers. However none anticipate a decrease in the number of staff.

The release or the latest data coincided with the announcement by President Nestor Kirchner that unemployment last October dropped to 10%. During the third quarter the unemployed were 11.1% equivalent to 1.72 million urban residents.

However this does not contemplate the under employed, 2.03 million, who work less than 35 hours weekly, including those who are looking for their first job.

Therefore the total number of unemployed or under employed total 3.75 million people.

"Argentina is growing at a sustained annual rate of 8% which will help us take unemployment down to one digit", said President Kirchner, emphasizing that the construction industry is an example of that dynamism with an expansion rate of 12% in 2004 and 26% in 2005.