MercoPress. South Atlantic News Agency

Argentina’s industrial output up 10.3% in January over a year ago

Steel production rose 28% to 5.14 million tons in 2010

Argentina’s industrial output climbed 10.3% during January compared to the same month in 2010, according to the Indec national statistics bureau. The volume reported was higher than the one expected by analysts, who had announced an 8.1 percent increase of the Industrial Monthly Estimator (EMI) in January.

However industrial production fell 5.6% compared to the volume registered during December 2010.

January is peak summer holiday season in Argentina and many manufacturing concerns take advantage of the lull in activity to retool and repair their factories.

Indec noted annual gains last month in textiles of 10.7%, tobacco 7.2%, printing 4.1%, petrochemicals 9.8%, automobiles 38.6%, machinery 26.9%, nonmetallic minerals 14.4% and base metals 5.3%.

Food processing activity increased 3.6% as higher output of edible oils, milled grains and sugar offset declines in red meat and dairy production. The production of paper and cardboard fell 0.2% on the year, while oil refining fell 6.5%, and plastic and rubber production contracted 5.8%.

Overall capacity utilization fell to 69.5% from 82.9% in December. The highest levels of capacity utilization were noted in refining, 86.5%; petrochemicals 82%; rubber and plastics 77.4%; textiles 76.2%; printing 74.7%; and nonmetallic minerals 74.1%.

After barely growing at all in 2009, industrial output expanded 9.7% last year thanks to strong demand by Argentine consumers and top trading partner, Brazil.

Steel output rose 28% to 5.14 million metric tons in 2010. Automobile production jumped 41.2% on the year to 724,023 vehicles, of which 447,953 were shipped to export markets.

However manufacturers face a more challenging year in 2011, including high inflation, political noise in the run up to general elections in October, and more subdued economic growth.

The central bank has forecast GDP expansion of 3.5% to 6.5%, down from about 9% in 2010. Inflation that most private sector economists say is running at more than double the 10.6% the government reported in January could also start to erode the competitiveness of export orientated manufacturers.