Argentina’s manufacturing sector recorded its second consecutive monthly improvement in August, reaching its highest level during Javier Milei’s administration. However, it contracted by 6.9% year-on-year, and contracted by 13.6% in the first eight months of 2024.

According to data released on Tuesday, the INDEC statistics bureau’s Industrial Production Index showed a monthly increase of 1.5% in August. It had risen 7.2% in July after hitting a June low.

However, the sector is a long way from recovering the levels seen before the change of government. The Javier Milei administration’s early policies deepened the ongoing recession. Rising unemployment has also affected consumption and demand for industrial products.

Compared to August 2023, only four of the production index’s 16 divisions showed increases. These were food and beverages, clothing and footwear, oil refining, and other transportation equipment. Only the first two have significant weight in the INDEC indicator.

In the food sector, the main rise was in oilseed milling. There was also an increase in fish and wine production.

The largest year-on-year declines were in non-metallic mineral products (-22.2%), machinery and equipment (-19.2%), and wood and paper products (-17.8%).

According to INDEC, the reduced activity in wood and paper was primarily linked to a decrease in the production of paper and cardboard for packaging and containers due to lower orders from sectors such as construction materials and footwear, as well as a decline in domestic demand for wood in the construction sector and furniture industry.

In the machinery and equipment segment, the decline was mainly associated with poor performance in agricultural machinery, while the drop in non-metallic mineral products was linked with the downturn in construction, leading to lower demand for materials such as cement.

–Ámbito