Graphic: Industry reports show record-breaking recession

21st May 2020

By The Essential Staff

Graphic: Industry reports show record-breaking recession

Argentine state officials have been working with (and leaking) estimates of a strong but not unprecedented economic recession this year, sometimes even reaching two digits of GDP drop for the year like in the country’s 2001-2002 crisis, when a 10.9 percent contraction was registered. But reports of industrial and construction sectors show a much more alarming deterioration this year so far. And with COVID-19 cases only starting to rise in Argentina, a quick turnaround to end the year in a much stronger note could prove hard to achieve.

</p> <img class="wp-image-10042 aligncenter" src="" alt="Argentina's industry and construction index show a larger recession than expected might be coming this year" width="829" height="465" srcset=" 2500w, 300w, 1024w, 768w, 1536w, 2048w, 600w" sizes="(max-width: 829px) 100vw, 829px" /> <p>According to public and private data compiled by the <a href="">Invecq consultancy agency</a>, sector-by-sector figures available for March and April are unprecedentedly alarming. The car industry might be the most impressive case, with a total of 0 new cars manufactured in April, a 100 percent drop in an industry that was already in <a href="">dire straits prior to this crisis</a>. Similar, although not quite catastrophic figures can be seen in other manufacturing businesses.</p> <p>As for construction, another key sector for blue-collar jobs just as manufacturing, the drop was even more dramatic. March saw a 32.3 percent drop when compared to February and 47 percent in the year-on-year comparison. &#8220;But construction activity only stopped on March 20,&#8221; Invecq&#8217;s report argued. &#8220;This means that April and May will show much worse declines.&#8221; In fact, analyzing sales of construction inputs in the Construya index, which is often a good private proxy for INDEC&#8217;s public statistics in the construction sector, which come out later, the drop in April was of a staggering 75 percent, as the chart shows.</p> <p>Overall economic activity is also looking grim, with the INDEC statistics bureau reporting <a href="">yesterday</a> a 11.5 percent contraction for March when compared with the same month in 2019. That figure could easily double in April considering the much larger extent of the lockdown that month.</p> <p>

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The Essential Staff

The Essential is a premium subscription-based news platform that brings you high quality journalism and in-depth coverage in English about the changing face of Argentina’s politics and economy.