The manufacturing industry grows by 9.3% year-on-year and consolidates the recovery

Manufacturing industrial production recorded a year-on-year increase of 9.3% in June, according to data released by the National Institute of Statistics and Censuses (INDEC). This result marks a positive semester for Argentine industry, which accumulated a 7.1% increase in the January-June period compared to the same semester of 2023.

The performance reflects a sustained reactivation of private production after years of decline and restrictions on access to inputs, in a context where the normalization of foreign trade and macroeconomic stability are beginning to generate concrete effects on real activity.

The report details that 15 out of 16 industrial divisions showed year-on-year improvements, showing a broad-based recovery across different manufacturing sectors. The most notable increases were observed in sectors with higher technological complexity and added value, which have historically been affected by import controls.

The "Other equipment, devices, and instruments" category led growth with a 42.7% year-on-year increase. The manufacturing of cell phones, televisions, engines, and transformers was the main driver of this surge, following a 2023 marked by shortages of imported components. 

The "Furniture and mattresses" industry also showed a significant rebound, with a 38.2% increase. Within this category, furniture production grew by 58.2%, possibly in line with the recovery of durable goods consumption in the domestic market.

Meanwhile, the automotive sector showed a 29.0% year-on-year improvement. Utility vehicle production increased by 58.9%, while automobile production expanded by 7.6%. In addition, auto parts production grew by 17.2% year-on-year, driven by higher demand from both the domestic market and automakers. 

Other sectors that recorded significant year-on-year advances were Tobacco products (+31.3%), Machinery and equipment (+17.3%), particularly due to the increase in agricultural machinery (+21.5%) and household appliances (+21.6%), and Non-metallic mineral products (+19.7%), driven by demand for construction inputs such as tiles, concrete, and gypsum boards.

Publishing and printing activity also rebounded strongly: the "Wood, paper, publishing, and printing" category grew by 14.4%, with a 22.4% increase in publishing and printing tasks, mainly attributed to higher orders from the food and beverage industry.

The only contraction was recorded in the "Metal products" division, which fell by 5.8% year-on-year. According to the report, the decline is explained by the poor performance of metal products for structural use, with a drop of 18.3%, which could be linked to some slowdown in specific segments of public works.

The data correspond to the survey conducted by INDEC at more than 5,000 industrial establishments throughout the country. The director of the agency, Marco Lavagna, stated that the report reflects "a widespread improvement in manufacturing activity", without making statements about the causes of the rebound.

The positive numbers of the June manufacturing IPI contrast with previous periods in which foreign exchange controls, state intervention in imports, and tax pressure discouraged private investment and the growth of the productive sector. The current expansion of the industrial sector appears to indicate a change in economic conditions, with greater openness to investment and foreign trade, conditions necessary to sustain this type of recovery.