Uruguay Industry


Uruguay: Industrial production contracts in September

November 11, 2013

In September, industrial production contracted 3.6% over the same month last year, which marked a deterioration over the 0.5% increase recorded in August. This is the lowest reading since January 2012. The result was mainly driven by a decrease in production of food and beverages, followed by a drop in paper production. The poor showing in the latter reflects the conflict between Uruguay and neighboring Argentina over contamination from a paper production plant located on the border between the two countries. Buenos Aires accused Montevideo of reviving an old conflict after Uruguay's president Jose Mujica authorized the plant to increase production on 27 September. This resulted in spilling toxic residue that allegedly exceeded the legal limit into the Gualeguaychu and Uruguay rivers on the country's border with Argentina. In retaliation, Argentina reduced its paper imports from Uruguay.

Excluding the contribution of the La Teja refinery-the country's only oil refinery and a key contributor to overall production-industrial output contracted 7.3% in September, which marked the lowest reading in more than four years. Meanwhile, annual average growth in industrial production dropped from 7.6% in August to 6.0% in September, thus contributing to the downward-sloping trend.

LatinFocus Consensus Forecast panelists expect industrial production to increase 3.7% this year, which is down 0.5 percentage points from last month's forecast. For 2014, the panel sees industrial output at 5.3%, which is down 0.3 percentage points over the previous month's estimate.


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Uruguay Industry Chart

Uruguay Industry September 2013

Note: Year-on-year changes and annual average variation of industrial production in %.
Source: National Statistical Institute (INE).

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