MercoPress. South Atlantic News Agency

Argentine industrial activity in July contracts 9.5% and 8.8% in seven months

Industry contraction seems to be slowing down in some sectors

With most sectors contracting industrial activity in Argentina plunged 9.5% in July compared to the same month a year ago accumulating in seven months a descent of 8.8%, according to an official report from the Argentine Industrial Union, UIA.

Food and beverage contracted 8.5%; automobile industry 24.1%; auto-parts 30%; steel 33% and paper and pulp, 3.8% among others contributed to the poor showing of July compared to the more modest fall of June which was 3.5%.

However the June 2009 index benefited from the fact that a year ago was the peak of the Kirchner couple administration clash with farmer organizations that included a ban on grain, beef and diary produce trading plus highway blockades.

The report points out that the July evolution is “more in line with what is really happening and not the June index of minus 3.5%, given the turbulences that industrial activity was exposed to during the first half of last year with the farmers’ conflict”.

This is more precisely observed with the food industry: “while last June it showed an exceptional expansion, 22%, this was because of the contraction of June 2008, and in July the opposite happened, falling back more that the annual average”

Similarly in the auto industry the fall (minus 24.2%) is comparable to that of the last few months; a lesser setback than during the first quarter average of minus 44.8%, but above the June minus 13.1%”.

The report from the UIA Centre of Studies said that some sectors managed to counter partially some of the worst descents.

This is the case of chemicals and petro-chemicals, rubber and plastic sectors which experienced growth ranging from 27% to 10% respectively.

In July these were the only two positive sectors.

UIA adds that according to preliminary estimates from the Food Industries Coordination Office, food & beverage experienced a year to year contraction of 8.5%, accumulating 1.8% expansion in the first seven months of this year compared to the same period of 2008.

“Overall in the rest of the sectors industrial activity continues to show scarce dynamism and significant contractions, although there are also signs of some slowing down in the contraction pace of some sectors”, adds the report.

This is the case of metal-mechanics, textiles, rubber & plastic, paper & pulp, auto-parts, wood & furniture and other construction materials among others.