Itaú BBA - Industrial activity decelerates in Argentina

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Industrial activity decelerates in Argentina

April 5, 2019

Indec also reported construction activity indicators for February.

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Industrial production rose 2.4% mom in February, after growing 4.8% in the previous month. As a result, industrial output fell 4.7% qoq/saar in the quarter ending in February, from -19.7% in the quarter ending in January. In year-over-year terms, industrial activity fell 8.5% yoy in February, marking its tenth consecutive drop. Looking at the breakdown, activity from all sectors declined in the period, with the exception of the tobacco industry. Basic metals fell 34% yoy, followed by machinery and equipment (-31.6%) and car industry (-11%). 

Indec also reported construction activity indicators for February. Construction increased 8.3% mom, after growing 4.6% in the previous month. In year-over-year terms, the index fell 5.3% yoy in February, posting the sixth consecutive drop. Employment in the sector rose 2.2% mom, but dropped 1.7% against the same month of 2018.


According to Anfavea, auto production reached 241k in March, below our forecast (257k). In seasonally adjusted terms (our estimates), production remained virtually stable. The 3-month moving average increased 5.0%. From a demand standpoint, domestic sales increased 5.2%, marking the third consecutive monthly increase. On the other hand, exports remained stable on a weak level. With this result, our preliminary forecast for March industrial production decreased to -0.8% mom/sa (-5.3% yoy), from -0.5% previously.

Supermarket real sales declined 0.9% mom/sa in February, leading the 3-month moving average to drop -0.2%, according to ABRAS. In year-over-year terms, supermarket sales advanced 0.3%. Our forecast for February’s monthly survey of commerce (to be released on April 9th) declined to -0.7% mom/sa in core retail sales (from -0.3%). For the broad segment (which includes vehicle and construction material), our forecast receded to -1.0%, from -0.7%.


Day Ahead: At 8:30 AM, the central bank will publish the GDP proxy (Imacec) for February. Overall, we expect the monthly GDP proxy to be flat (seasonally adjusted) from January, leading the annual growth to tick down to 2.0% (nsa). Nominal wage growth for February will also be released today, at 09:00 AM.


Day Ahead: March’s inflation data will come out at 9:00 PM. High frequency data for March indicates a month-over-month inflation of 0.44% (0.24% last year), lifted by a sharp rise in food prices as well as elevated beverage, housing and health prices, resulting in annual inflation of 3.22%. 

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