In June, industrial activity contracted 10.7% against the same month last year and registered a monthly rebound of 17.7% in the seasonally adjusted measurement, according to the survey periodically carried out by the Industrial Union. “The progressive authorization of activities in different jurisdictions of the country and the strict compliance with sanitary protocols in industrial establishments generated a certain recovery of the industry during June,” they say from the factory headquarters.
However, they clarified that the production of an important nucleus of companies still remains 11.5% below the level prior to the pandemic (February 2020).
With these data, in the first semester of 2020 a decrease of 13.8% was accumulated compared to the same period of the previous year. The seasonally adjusted improvement is linked to a recomposition of stocks after the brake in the activity and a partial recovery of demand in specific segments. The latter is due to changes in transitory demand patterns and the opportunities to purchase some durable goods derived from the exchange gap, as in the case of cars.
Almost three months after the start of the pandemic, during June 32% of industrial companies produced at the same level or with increases compared to the previous situation. The year-on-year falls in some sectors were softened by the relaxation of the strict quarantine, as is the case of construction-related assets, although the use of the industry’s installed capacity remains low (53.3% in June according to INDEC).
The items that recorded the greatest drops were basic metal industries (-42.3%), the automotive sector (-34.5%), oil refining (-42.3%), metalworking (-17.4%) and textile products (-11.7%).
The rest of the sectors contracted more moderately, such as publishing and printing (-6.8%), the consumer electronics industry (-6.7%), paper and cardboard (-3.3%) and non-mineral minerals. metallic (-1.5%).
On the other hand, the items considered essential during the quarantine registered interannual increases in June, being food and beverages (4.8%) and substances and chemical products (0.2%, although the sales of medicines contracted -2.7% y-o-y) the least affected in this context.
Industrial exports fell again in June (-45.9% year-on-year) mainly due to lower demand from Brazil (-60.2%). Added to the delicate external and local macroeconomic situation are the financial problems of the companies and the increases in costs associated with health protocols (transportation of personnel, tests, licenses, among others).
Regarding employment, the UIA highlights that there is an “unprecedented context” at the productive level in which the activity in the industry is at historically low levels with falls of 28.4% in April and 26.2% in May, But in those months, salaried employment in the industry maintained the interannual variations of the pre-pandemic, “which speaks of a state of significant rigidity in the flows of registered workers in the labor market.”