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Construction sank 24.6% in February and industry fell 9.9%.
They fell 2.6% and 0.7, respectively, in the inter-monthly measurement; the retraction was less than in previous months
Hit by the recession that the country is going through, two important engines of the economy deepened the trend they have been carrying since last year and showed large numbers in the red. Construction fell 24.6% in February, compared to the same month in 2023, while industry fell 9.9% in the same period. In the seasonally adjusted inter-monthly comparison, the declines were more moderate than in the last measurements, with 2.6% and 0.7%, respectively.
Both data were published yesterday by the National Institute of Statistics and Censuses (Indec) in its usual reports Synthetic Indicator of Construction Activity (ISAC) and Industrial Manufacturing Production Index (IPIM). The statistical organization also pointed out that in the first two months, works fell by 23.1%, compared to the same period last year, and factories, by 11.1%.
In the midst of so many negative figures, there was a gap for an optimistic outlook. Camilo Tiscornia, director of C&T Economic Advisors, said that in both construction and industry, the seasonally adjusted monthly variation, although it is a fall, is less than that seen in previous months. “If we take the case of the IPIM, in December it fell 8.2% monthly; in January, 1.3, and in February 0.7%; and if we analyze the ISAC, we see that in those months it fell 9.7%, 10.1% and 2.6%, respectively. This suggests that the fall began to moderate in February.”
When looking for the reasons for the bad timing of these activities, Tiscornia indicated that, in the case of the industry, what can be seen is that many sectors still claim that there is a lack of imported inputs, due to problems in the payment chain, while that others speak of the fall in domestic demand. “These are data that obviously mark the economic recession, but it gives the impression that there is a moderation compared to previous months,” concluded the economist.
Economist Natacha Izquierdo, head of Sector Practice at the consulting firm Abeceb, highlighted that the most affected items are those linked to construction and the automotive sector, with drops of more than 20%. “This is a result of the fact that access to imported inputs is still affected since domestic demand still shows no signs of recovery. Our projection is that this recovery will only occur in the third quarter,” explained the specialist.
In the case of construction, Izquierdo observed that the decline in the sector continues to intensify, which is demonstrated above all in the slowdown in public works. “When we see the asphalt numbers, which fall more than 64% and reach historical minimum levels (except for 2020, during the pandemic), this has to do with the stoppage of large infrastructure projects,” said the economist. And she added: “The same thing happens in private work. “This has to do with the fact that the opportunity gap is closing with respect to the exchange rate and the increase in the cost of construction in dollars of more than 170%.”
For his part, economist Lorenzo Sigaut Gravina, from the consulting firm Equilibra, said that in principle the recession continues to deepen. “In the case of construction, the drop was very strong. In this context, it is evident that the sector is hit, with a drop in employment. And in terms of industry there was also a strong decline, which began back in October of last year and continues now,” he commented.
The projections
Regarding what can be expected in the short term, Sigaut Gravina estimated that the trend will continue in May. “Indicators such as the sale of cement and other construction supplies indicate that activity will continue to be hit hard. And the same is seen in the case of industry, where car production data has already shown a drop,” said the economist.
Indeed, the data on construction inputs are not encouraging. The Construya Index (IC), which measures the evolution of the volumes sold to the private sector of construction products manufactured by the companies that comprise it, registered a seasonally adjusted monthly decrease of 11.2% in March, and remained at 40 % below the level of the same month of 2023. In this way, the accumulated from January to March closed 31.6% below the same period last year. “In March the drop in demand for inputs continues, due to the reduction in public works construction and expectations about the evolution of our market,” they explained in Construya.
On the industry side, the data on automotive production was eloquent. As reported by the Association of Automotive Manufacturers (Adefa), in March, with 18 business days of activity – four days less than in March 2023 –, vehicle production (cars and commercial vehicles) was 43,159 units, 29. 4% less than in the same month last year, when 61,104 had been manufactured.
With the complete data for 2023, which was released by Indec last January and which showed falls of 3% in construction and 1.8% in industry, economists were already projecting that this negative trend could continue in the first months of this year. anus. This is what Gabriel Camaño, from the consulting firm Ledesma, expressed at that time in a note published in LA NACION: “Everything indicates that it is likely that during the first quarter of 2024 negative variations will be seen with respect to the previous quarter, giving rise to the most commonly accepted recession. |
