:quality(85)//cloudfront-us-east-1.images.arcpublishing.com/infobae/3ZSZJA63F5GQDLKNHFBCGFTNW4.jpg "Access to dollars, electoral uncertainty and wage levels: the combo that industrial activity will face this year")
Industrial activity managed to grow by an average of 4.3% last year, despite macroeconomic instability and the lack of dollars to pay for imports. The drag of the previous year and the fact that the controls tightened more towards the second half worked in his favor. But 2023 looks much less promising. Not only will the basis for comparison be higher (making year-over-year growth weaker), but currency issues are expected to be more complex, elections tend to paralyze investment decisions, and purchasing power is much more affected due to inflation. Many factors are seen by analysts as conditions for the industry to maintain the levels of growth it saw last year. Private estimates indicate stagnation or slight growth of around 1.5%.
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The upturn in industrial activity is seen from September 2022. The Industrial Production Indicator (IPI) exhibited an interannual increase of 2.7% in December (the premium in monthly ounces), where a stagnation in the last quarter meant of the year. The industry also recorded, in the last month of the year, a seasonally adjusted decline compared to November, “consolidating the performance with ups and downs of the sector throughout the year, since it does not failed to accumulate two consecutive months of monthly improvements”. This means that in end-to-end growth (i.e. December 2022 compared to December 2021), there was a decline of 1.5%,” according to a recent report from consultancy Ecolatina.
In Equilibra, they also predict an adverse scenario for the industry this year. Manufacturing activity could underperform GDP even further, with a possible decline relative to 2022, should the overall scenario for the economy stagnate. “Industry and construction started the recessionary process in June, they will take a semester. And for 2023 we see huge challenges. On the one hand, there will be a direct impact of the drought on agro -industry, and on the other hand, we expect a tightening of import restrictions. This caps activity,” said the cabinet economist, Lorenzo Sigaut Gravina.
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The drop in the harvest will also have indirect impacts on sectors such as transport, agricultural machinery and the food industry, which together have a significant weight on industrial GDP (accounting for about a quarter of the general level), according to Ecolatina. Nor should we exclude “new import restrictions to manage the shortage of foreign exchange, which could complicate the supply of inputs to certain industrial sectors and complicate the normal functioning of the sector”, added the consultant.
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On the other hand, the contractionary bias in economic policy seen since the second half of last year could continue, even if it was an election year. “Attempts will be made to keep interest rates in positive territory, which makes access to credit for investment in capital or durable goods more expensive, while capital expenditure would also be reduced. Regarding this last point, the uncertainty brought by the electoral process could also encourage the postponement of purchases related to this type of industry,” said the economist of this firm. Agostine Myronec. He added that this implies that there is little budgetary room for maneuver to encourage certain industrial sectors (subsidized loans to SMEs, even grants/transfers to increase consumption, among others).
On the other hand, the correction of utility prices not only reduces household disposable income (with a possible impact on domestic demand), but also increases the cost of electricity and gas for companies in the sector.
From Abeceb, meanwhile, they claimed that industrial activity will not grow by more than 1.5% this year and the reasons are many. First, the slowdown started to be reflected in the second half of last year, with negative numbers already in the last quarter, and this trend continues. Import issues remain and that means higher dollar costs, more uncertainty and less predictability in continuous production industries. “The effect continues in 2023. And the trend is for a further weakening of the margin. The scenario is more exhausted, added to the fact that the macro context is more complex than in 2022 in terms of currencies,” he said. Natasha on the leftresponsible for the sectoral domain of Abeceb.
At the UIA, they also believe that 2023 will be stagnant for industrial activity. Entity sources explained that “there is a need to continue the growth recorded last year, but there is the challenge of the performance of SIRAs so that industries can have smooth access to inputs and can continue to produce”. In any case, they know that the scenario is complicated, and that it is also difficult in the current context to access financing. To discuss this agenda, the UIA Executive Committee met this Tuesday with the Secretary of Commerce, Matías Tombolini, with whom they work daily to detect cases of industries in a critical state due to a lack of supply. .
“From a demand point of view, we see that it is starting to suffer a bit, and the same goes for investment, which was very high in the first half of last year and then fell. stopped,” the manufacturing source said. entity.
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