Manufacturing rose in May. The IPI manufacturing index increased by 2.2% mom/sa in May, after increasing by 2.6% mom/sa in April. However, industry output fell by 2.0% qoq/sa in the quarter ending in May, following a 2.4% contraction in 1Q25. On an annual basis, manufacturing rose by 5.8% in May, and by 6.5% in the quarter ended in that month. All sectors grew in April on an annual basis, except for clothing, leather and footwear. According to the INDEC survey, 29.8% of companies expect an annual increase in internal demand over the next three months, 29.4% expect a decline and 40.8% foresee no changes.
Construction fell in May. The construction index decreased by 2.2% mom/sa in May, after rose 5.2% mom/sa in the previous month. Moreover, construction rose remains flat 0.0% qoq/sa in the quarter ended in May (2.4% qoq/sa in 1Q25). Construction activity increased by 8.6% yoy in May and by 16.4% yoy in the quarter ended in that month. Employment in the sector increased by 4.0% relative to April 2024 (figures have a one-month lag). According to a qualitative survey, 73.3% of those involved in private construction expect no changes in activity levels over the next three months. Meanwhile, 8.6% expect an increase and 18.1% anticipate a decline. Among companies primarily engaged in publics work, 15.0% anticipate a decrease in activity levels during the next three months, while 58.0% expect no change and 27.0% expect an increase
Our take: The mixed signals in the manufacturing and construction sectors in May were in line with our expectations. Our GDP growth forecast for 2025 remains at 5.2%.