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Manufacturing sector deteriorated, consistent with a soft external scenario

Julio Ruiz


Industrial production (IP) grew 3.2% yoy in November (from 3.1% in October), above both - our forecast of 2.8% and market expectations (as per Bloomberg). According to figures adjusted by working days, IP expanded at a slightly slower pace (3.0%), taking the quarterly annual rate to 3.4% in November (from 3.5% in 3Q22). Looking at the breakdown, the quarterly annual rate for construction sector stood at a weak -1.2% in November (from -3.3% in 3Q22), while manufacturing and mining sectors stood at 6.1% (from 7.1%) and -0.7% (from -0.9%), respectively.

Using seasonally adjusted figures, IP posted a null expansion in November, dragged by the manufacturing output (-0.5% mom) and consistent with a softer external demand. The seasonally adjusted annualized quarter over quarter (qoq/saar) rate of industrial production stood at 0.4% in November (from 1.2% in 3Q22), dragged by the manufacturing sector (-0.6%, from 4.9%). While construction sector rebounded (0.7% mom/sa), momentum remains soft, with a qoq/saar of 0.4% in November (from -7.1% in 3Q22).

We expect activity to slowdown in the last quarter of 2022 given a soft global scenario, after solid GDP growth rates in the first three quarters (we expect GDP growth of 2.9% for 2022). Slow activity is likely to continue throughout this year, with a GDP growth rate of 1.3%.

Julio Ruiz