Activity of the SME industry in Argentina falls 9.9% year-on-year in February

Manufacturing industry activity SME of Argentina Last February, it registered a drop of 9.9% compared to the same month last year and a contraction of 7.7% in relation to last January, sector sources reported this Sunday.

According to a report from the Argentine Confederation of Medium Enterprises (Came), February was the third consecutive month in which activity fell, although the rate of retraction slowed after having collapsed 27% and 30% year-on-year in December and January, respectively.

In the first two months of the year, the SME industry has accumulated a collapse of 21.7%.

According to Came, the level of use of the installed capacity of companies was 70.9% in February, similar to that of January, and, although 32.7% of industries continue to report problems replenishing stock, “These are difficulties of a much smaller scale than previous months.”

In a context of high inflation (276.2% year-on-year in February), the business entity pointed out that “What was most worrying in February were the cost increases, especially in services and fuels”.

“The industries consulted expressed the difficulties involved in translating these increases into prices in the current context. At the same time, there is uncertainty about the impact that the opening of imports could have in some sectors,” adds the report.

The Argentine Industrial Union (UIA), the largest business entity in the country, warned last Tuesday in a statement of the fall in the domestic market and the impact of the growth in costs that the manufacturing sector has suffered in the first two months of the year.

The entity claimed government of Javier Mileiwhich launched a severe economic adjustment, new industrial policy instruments “to cushion the impact on SMEs and regional economies in the face of a recessionary scenario.”

Last year, the Argentine industry accumulated a drop in 1.8%, in contrast to the 4.2% improvement recorded in 2022.

By 2024, private consultants expect that the contraction of the manufacturing sector will continue in the first part of the year with the possibility that, if the economy manages to move towards stabilization, it will partially rebound in the second half.