Industrial expectations continue to improve, but are still in the contraction area. In the seventh month of the year, the indicator improves strongly compared to June, although it is still outside the level of Expansion Prospects. . / José Pazos

Despite the fact that the production of industrial SMEs registered a 23.5% drop in June compared to the same month of 2019, according to the Argentine Confederation of Medium-sized Enterprises (CAME), the gradual lifting of the measures of social and preventive isolation due to the coronavirus was decisive so that in July industrial expectations improved, which returned to similar values ​​prior to the restrictions, according to a private report.

He Institute of Economics (INECO) of the Universidad Argentina De la Empresa (UADE) presented the Industrial Expectations Index (IEI) July, which describes the prospects for Argentine industrialists for the next three months. He reported that the relaxation of the quarantine produced an improvement in industrial expectations. In this period, the indicator presents a value of 48.7, which represents an improvement over the previous month.

Industrial expectations continue to improve, but are still in the contraction area. In the seventh month of the year the indicator rises sharply with respect to June, although it is still outside the level of Expansion Prospects

This improvement occurs due to a reduction in negative expectations. Likewise, This reduction in pessimistic expectations translates into perspectives that the situation will continue (two thirds) and the remaining third that it will improve, according to the UADE report.

Meanwhile, industrial expectations continue to improve, but are still in the contraction area. In the seventh month of the year, the indicator improves strongly compared to June, although it is still outside the level of Expansion Prospects.

According to the study, this increase is due to an improvement in all the items that make up the index, « probably as a consequence of the relaxation of the measures imposed by ASPO. »

In another order, he indicated that the most relevant changes are those that refer to expectations of future production and expectations of use of installed capacity.

« It is important to note that the expectations on the expected production (52.6) and on the utilization of the installed capacity (56.4) are in values ​​that indicate levels of expansion of industrial activity« The report highlighted.

He also added that there are similarities in the behavior of industrial expectations and the production actually carried out as measured by the Manufacturing Industrial Production Index.

« Clearly, the relaxation of the quarantine from the second half of July improved industrial expectations. It is showing that in April it was the activity floor”, Analyzed Fausto Spotorno, Academic director of the Degree in Economics at UADE.

In this sense, he remarked that July is showing a strong improvement in expectations because the market is waiting for the isolation to end. « What you see is something more positive than what we were seeing but the indicator continues on the negative side of expectations, » he said.

Most industrialists are saying that while pessimism is lower there are still no good expectations. The number of people waiting for improvement has not increased, but there are many more people who were pessimistic and hope that this situation will hardly improve (Fausto Spotorno)

« Most industrialists are saying that while pessimism is lower there are still no good expectations. The number of people waiting for improvement has not increased, but there are many more people who were pessimistic and hope that this situation will hardly improve, « he assured.

It should be noted that the index is designed to reflect the prospects for growth or decline in industrial activity. The IEI is an index that goes from 0 to 100. When the IEI is greater than 50, it indicates that an expansion is expected in the industry, while a value below 50 indicates that a contraction in the manufacturing industry is expected.

Likewise, the indicator is built on the basis of the following variables: Expected Industrial Production, Staffing, Hours worked and Expectations of Capacity Utilization.

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