The Argentine Industrial Union (UIA) has expressed deep concern over the industrial sector's contraction, which has continued for 13 consecutive months. This suggests that the Argentine economy is still showing no signs of recovery. According to the UIA's research institute, the industrial activity index was 45.3 points in July, falling below the 50-point expansion threshold for the 13th straight month. This represents a 2.3% decrease from the previous month and a 4.3% decline since December 2024. This production slump has directly hit the job market, driving up the unemployment rate.
A UIA survey of 787 companies clearly shows the reality facing Argentina's industrial sector. Of the companies surveyed, 36.3% reported a decrease in production compared to their second-quarter average, while only 21.8% increased production. The sales slump is even more severe, with 43.5% of companies experiencing a decline in sales, and only 18.6% reporting an increase. In the export sector, 30.5% of companies reported a decrease in exports, and only 16.6% reported an increase.
The most concerning issue is the employment situation. A total of 24.4% of the surveyed companies have reduced their workforce, leading to high unemployment rates similar to those in April of last year. This persistent economic downturn is darkening companies' future outlook. The percentage of companies with a positive view on future economic conditions has significantly decreased to 48.6%, down from 57.8% in the previous survey.
The biggest concern weighing on companies was a decline in domestic demand (40.1%), followed by rising costs (21.4%). Additionally, over half of the companies complained that market competition has become more intense due to low-priced similar products entering the market through unofficial channels, such as smuggling.
Experts point out that the Argentine government must urgently reorganize its economic policies and implement proactive measures to address the difficulties faced by the industrial sector. A prolonged production contraction and job insecurity could, in the long run, shake the foundation of Argentina's economy. The industrial sector hopes the government will introduce effective support measures and make efforts to revitalize domestic demand.
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