Argentina Industry June 2017

Argentina

Argentina: Industrial production jumps in June

August 1, 2017

In June, industrial production jumped 6.6% over the same month last year, according to the latest data released by the National Statistical Institute (INDEC). The reading followed the significant 2.7% growth observed in the previous month—which put an end to fifteen consecutive monthly declines in industrial production —and marked the highest reading in almost six years. Moreover, it was almost double the 3.4% expansion that market analysts had expected.

According to INDEC, June’s strong growth mainly came on the back of expansions in the food, automobile, chemical, metallurgic, oil, paper and basic metals industries and higher production of non-metallic minerals and rubber and plastic. On the other hand, the textile industry was the only one to decline in annual terms. The expansion in the food industry was driven by a near double-digit jump in red meat production, largely on the back of buoyant external demand. The production of beverages benefited from growth in both wine and beer production, while production in the paper industry was stimulated by stronger demand for packaging from the food industry. Both the metallurgic and non-metallic minerals industries continued to benefit from expanding activity in the construction sector, with the metallurgic industry also supported by rising agricultural production and the good performance of durable goods. Lastly, the automobile industry grew by more than 15% compared to the same month of last year, mainly thanks to a sharp increase in the production of light commercial vehicles, largely benefiting from strong external demand from other Latin American countries.

The accumulative average variation in industrial production in the first six months of the year was zero, a considerably better result than the 1.4% accumulative average contraction recorded in the first five months of the year.

Panelists participating in the LatinFocus Consensus Forecast expect industrial production to expand 2.9% in 2017, which is down 0.1 percentage points from last month’s forecast. For 2018, the panel expects industrial output to rise 2.6%.


Author: Massimo Bassetti, Economist

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