Industry fell 2.9 percent in October | So…

Industry fell 2.9% year-on-year in October, which implies a cumulative drop of 9.9% in the first ten months of the year, according to INDEC. The data reverses the trend that appeared to have changed in September, the month that recorded the first growth of the year and the largest since May 2018 (up 3.7% year on year).

Government sources attribute the drop in the indicator in October to two factors. On the one hand, the number of working days that the months had compared to the previous year: while September 2020 had one more working day than 2019, in October it was the opposite. “For the industry, working days matter, because, for example, beef slaughter or automobile production depends a lot on working days,” they say. The two-month period from September to October, with the same number of working days as last year, ended with a 0.4 percent year-over-year improvement. The other factor behind the October numbers is that a the automobile stopped the factory for a few days to adapt it to a new vehicle whose production began in November.

At the level sectoral year-over-year growth was recorded in 5 of the 16 blocks. The biggest increases have taken place machinery and equipment, which increased by 27.3% year over year mainly due to the growth in the production of agricultural machinery and, to a lesser extent, the increase in the manufacture of household appliances (refrigerators, washing machines and kitchens). Another element that has had a positive impact is that of furniture and mattresses and other manufacturing industries, which grew 7.1 percent year-over-year. Non-metallic mineral products were up 6.3% year-over-year, driven by growth in almost all construction inputs, especially manufacturing cement and non-refractory clay and ceramic products. During this time, they led the autumn transport equipment of the month (-31.5% year-on-year); clothing, leather and footwear (-24% year-on-year) and petroleum refining (-21.6% year-on-year),

By November, expectations of the private and public sectors are positive. For the first time since the start of the pandemic, more companies say they are hiring staff in the coming months (15.4%) than those that will expel (11.4%). Also for the first time, there are more who believe that domestic demand will increase in the coming months than those who believe it will contract.

From the government, they accompany figures: automobile production increased by 20% year-on-year, and cement shipments by 28%. “95% of the time that the two sectors develop simultaneously, the industry as a whole does too,” they say.