Industrial production of SMEs fell 3.9% from one year to the next in June

Production of industrial SMEs fell 3.9% from one year to the next in June and accumulates the second month of decline after increasing by 10 months, according to a report by the Argentine Confederation medium-sized enterprises (CAME).

Only 34% of businesses increased and the use of installed capacity fell to 59.1%, according to the study.

"Increases in costs, especially inputs, services and financial services, are more absorbed by firm profitability, while the higher exchange rate favors exporting firms, but those that do not. "It is more difficult to find markets," CAME said.

He also pointed out that the decline in domestic demand combined with an international market that requires few Argentinian products, has led to a sharp decline in the market. industrial activity in June.

"Compared to May, there was a decline of 8.4% measure with seasonality), while in the six months of the year accumulates a growth of 1.2 % compared to the same period of 2017. "

Of the 11 sectors studied, 10 fell and only 1 progressed (still talking about the annual comparison) .The only item in increase was the development of" non-mineral products with an annual increase of 4.8%, although with difficulties of profitability, the report showed that

In this sense, he maintained that "most of these firms have their entries related to dollar and have received several adjustments so far this year without transferring much of these increases to their selling prices. "

On the other hand, he explained that they had annual falls:" Rubber and plastic products "(-9.9%)," Transport equipment "(-7.8 %), "Electromechanical products and IT (-8.7%)," Footwear and leather goods "(-5.5%)," Food and beverages "(-5.2%)," Wood and furniture "( -4.1%), "Textiles and Clothing" (-3.0%), "Metal Products, Machinery and Equipment" (-1.4%), "Paper, Paperboard, Publishing and Printing" (-1.5%) %) and "Chemicals" (-2.4%).

Specified that the increase in fuels, in interest rates and services have generally affected the business capacity re.

"Growth from one year to the next reached only 34% of the industries this month (48.7% of SMEs increased in March, 44.3% in April and 39.4% in May), "he added.

Due to cost increases, declining sales and greater difficulties in transferring these price increases, the proportion of industries with positive profitability was reduced to only 35.4% (compared with 54% in March , 46.7% in April and 39.4% in May).

On average, the companies consulted indicated that they only transferred 49% of their cost increases to their sales. The difference has been absorbed by their profitability, although they predict that when market conditions improve, they will have to open up these prices.

Finally, the CAME reported that the industry is working with a high idle capacity and that the use of installed capacity has further decreased in June, to only 59.1% (vs. 64.3%). % in March, 62% in April and 60.5% in May.)

"Financial and currency uncertainty and all higher interest rates affect investment plans companies, for the next six months, only 23% of industrial SMEs plan to make new investments, 17% evaluate and 55% have already decided that this year they will not make new moves in this direction " he concluded. [ad_2]
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