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Expansion was supported by construction sector, while manufacturing output grew at soft pace

Julio Ruiz


Industrial production (IP) grew 3.1% yoy in October (from 3.8% in September), above our forecast of 2.1%, but broadly in line with market expectations of 3.3% (as per Bloomberg). According to figures adjusted by working days, IP expanded at a slightly faster pace (3.2%), taking the quarterly annual rate to 3.3% in October (from 3.5% in 3Q22). Looking at the breakdown, the quarterly annual rate for construction sector stood at a weak -3.1% in October (from -3.3% in 3Q22), while manufacturing and mining sectors stood at 6.7% (from 7.1%) and -0.5% (from -0.9%), respectively.

Using seasonally adjusted figures, IP expanded 0.4% mom, supported by a rebound in construction sector of 1.0%, while manufacturing output grew at a soft 0.1%. The seasonally adjusted annualized quarter over quarter (qoq/saar) rate of industrial production slowed to 0.4% in October (from 1.3% in 3Q22), with the manufacturing output losing momentum (2.0%, from 5.4%), while construction sector stood at a weak -6.4% (from -8.3%).

Solid activity observed in the first three quarters of the year is unlikely to last amid a deteriorated external scenario. Manufacturing output is likely to soften during the rest of the year and throughout 2023.

Julio Ruiz