The Argentine Industrial Union (UIA) highlighted the continuity of manufacturing growth in the country during 2022, after three consecutive years of decline in industrial activity, by announcing the latest survey carried out among the entity’s companies.
In this way, in the first ten months there was a favorable evolution in production of 7.8% year-on-year, returning to the production levels of 2015.
However, towardsthe last quarter there was a growth slowdownconsequent of the international context generated both by the third wave of Covid-19 as by Russia’s invasion of Ukraine.
This situation caused a rising energy prices and the need for external supplywhich made the macroeconomic context more difficult, producing an acceleration in inflation levels and tensions in the exchange market.
Furthermore, this impacted the Central Bank reservestriggering greater restrictions on imports of key inputs for production.
The report also maintains that, although in October the industrial activity marked an interannual rise of 6.1%, there was a monthly fall (without seasonality) of 0.9%, according to the CEU industrial production index.
Regarding foreign trade restrictions Russia’s invasion of Ukraine at the beginning of 2022 resulted in a rise in the prices of fuels and other inputs.
“Although during the winter there were no major restrictions in the supply of energy, the rise in international prices had an impact on the increase in the energy trade deficit, and had an important weight in reducing the record trade surplus that had been registered in 2021” , says the study.
Consequently, this context led to an increase in import restrictions and the scarcity of many inputs necessary for production.
For his part, he industrial employment continues in Recoveryregistering in October a increase in staffing of 17.1% of the participating companies.
Meanwhile, 10.5% of the companies “indicated that they reduced their staffing, accelerating with respect to the previous survey (only 5.3% had reduced their staffing),” the report concluded.
