In 2023, the national industry experienced its worst year in almost a decade, according to the INDEC manufacturing production index. Only one month in 2019 and three in 2020 recorded records lower than the average drop of 12.8% in December 2023. This indicates a significant decline in factory activities compared to December 2022.
Several sectors such as agricultural machinery, steel, electrical equipment, appliances, base metals, food and drinks of Argentina were affected by this decline. The production of beef and oilseed grinding was particularly hard hit. These declines reflect the long-term trend of low-quality, unstable, and unproductive jobs and deteriorating salaries. Informal employment without labor or social coverage has reached around 47% of existing employment in the country.
The construction industry also reflected a bleak outlook with a drop of 12.2% in December 2023. Business expectations on employment, hours worked, and GDP all indicate a lack of optimism in the industrial sector. Retail sales figures also showed an average drop of 28.5% in January compared to January of the previous year.
The Central Bank’s survey predicts that the price index will only return to single-digit numbers in July, indicating high levels of inflation. This is also known as stagflation characterized by uncertainties and a significant impact on vulnerable social sectors.
The lack of a clear plan to address stagnation and inflation has raised questions about the government’s approach to economic challenges. Some see commitments to achieve balance in public accounts and end inflationary financing of the Central Bank as a step in the right direction while others question its impact on provincial subsidies for public transportation and their effect on low-income individuals with unstable jobs.
In conclusion, significant challenges lie ahead for the national industry and wider economy with an uncertain outlook requiring urgent action to address stagnation and inflation that has plagued Argentina’s economy for years now