MercoPress. South Atlantic News Agency

Argentine manufacturers send a strong disappointment message to government

Companies expect the Argentine economy to expand anywhere between 0 and 0.5%

The Argentine Industrial Union, UIA, the country's manufacturers strongest lobby released the results of a poll on Wednesday warning about the lower level of economic activity expected this year. The poll covered 300 corporations belonging to the organization and forecasts no jobs creation and abundant layoffs.

 Precisely one of the areas which has generated most concern is the auto industry which only this week announced the suspension of 1.000 workers at the Peugeot plan. It is estimated that up to 12.000 auto workers from different factories are experimenting lesser work hours, anticipated vacations or simply temporary fallouts.

During the last decade auto manufacturing and exports have been one of the most dynamic sectors of the Argentine economy, with annual sales in the range of a million units.

As to the level of activity anticipated for 2014, the industry bosses estimated that Argentina's GDP would expand in the range of 0 to 0.5%. Lesser profit margins are also expected, because of a fall in consumption, which also means that higher costs will have to reflect in dearer prices.

The poll also indicates that only 30% of companies interviewed took advantage of the loans offered by the Cristina Fernandez administration at low and subsidized rates. The majority of those that did take them were mostly small and medium sized companies with not much impact on employment or new jobs.

The majority of entrepreneurs are concerned and feel not encouraged because of the absence of rules to adjust budgets and costs to inflation, the tax on checks and the delay in returning VAT collected by government.