The government relied on early January statistics to confirm the deepening of the industrial reactivation process and of the construction, two sectors that he considers key in his management model that seeks recover currency and generate genuine employment. A report from CEP XXI, dependent on Ministry of Productive Development, stressed that the energy consumption in the first month of the year in factories ratified the path of economic recovery based on production. The statistics speak of 7.9% improvements versus 2020, when there was still no coronavirus pandemic.
« The recovery is very clear and forceful »said the minister Matias Kulfas in radio statements when referring to the numbers that showed the construction, Next to the industry, as the engines of economic takeoff. For this reason, he stressed that « these two sectors are driving the recoveryThey are producing above what happened in the government of (Mauricio) Macri. «
Kulfas, one of the spokesmen for the Economic Cabinet that designs the prices and wages agreement to deepen the reactivation through the strength of the domestic market, said his predictions in concrete numbers that CEP XXI showed. It happens that the energy demand realized manufacturing sectors with an operating rate of between 10% and 20% above the 2019 average, before coronavirus restrictions hit hard.
The December « Productive Panorama » prepared by CEP XXI details that growth was driven by branches such as manufacturing, “Which by the last two months of the year had not only recovered what was lost due to the pandemic but had also managed to place themselves between 4% and 5% above the last months of 2019”.
According to the CEP XXI leading index of industrial activity (which takes energy consumption in the main industrial plants as input), « the manufacturing sector had an expansion pushed by branches like automotive (+ 17.5% year-on-year), that of construction materials (Cement shipments rose 19.2% year-on-year in January and those of the large construction companies in Grupo Construya did so by 24%), rubber and plastic (with a year-on-year expansion of 14% in energy consumption) and particularly the iron and steel industry« .
Homes, cars and countryside
The report cited data published by the Argentine Chamber of Steel, where the production of crude steel rose 24.3% year-on-year, the manufacturing of hot rolled it was the largest since January 2008 and of cold rolled the largest since January 2005. « The good performance of this sector is due to the intense demand that is registering from sectors such as construction, automotive, agricultural machinery and metalworking, » they highlighted from the productive highway.
Another of the data that emerged from the use of energy is that the 53% of the more than 1,000 industrial plants relieved consumed more energy in January 2021 than in the same month of 2020. « In this sense, the seasonally adjusted energy consumption in the automotive industry was 20% higher than the average for 2019, that of metalworking was 18% higher, that of textile and leather 15%, base metals 13%, non-metallic minerals 12% and rubber and plastic 10%. In turn, in all these sectors – which account for around 35% of industrial GDP – there was seasonally adjusted monthly growth » , the report detailed.
According to official information, among the reasons that explain the January numbers, CEP XXI found « the Recovery of the demand in branches like home appliances -with the help of the Now12 program-, Farm Equipment, industry automotive and that of materials for construction.
But he also highlighted that the traction was accompanied by the results of the import substitution, and gave as an example that « in January National car patents were 47% of the total, when a year ago they were 29% « .
Another reason was the peculiarity that in January, unlike other beginning of the year, « there were fewer plant stops for vacations« . » This anomaly was not occurring in February, where in the first days of the month a growth rate more similar to that of the last months of 2020 was observed, « CEP XXI highlighted.
« The recuperation in industrial activity is positively impacting formal employment. According to data from the Argentine Integrated Pension System (SIPA), in November 2020 there were 8.4 thousand more jobs in the manufacturing industry than in the same month of 2019, and employment was created for the sixth consecutive month, something that had not happened since 2015. However, that Increase in job creation is heterogeneous according to the activity and even within the industry itself and it depends a lot on the performance of each sector, « the press release highlighted.
Latin America: recovery of regional economies
At the regional level, the report indicates that the sustained growth in the prices of raw materials during the last year would improve the recovery prospects of local economies. As an example, the increases in grains, copper and oil represent a significant improvement in the terms of trade, in a context in which China – the main buyer of food, metals and energy – foresees an economic expansion that could be above 8% in 2021.
In addition, the latest forecast for International Monetary Fund corrected upwards the growth forecast for the region, to the 4.1% in 2021, higher than the 3.6% expected in October.