The National Institute of Statistics and Census (INDEC) reported that the manufacturing sector contracted in July for the second consecutive month, with its activity once again falling below its levels seen at the end of 2024.
The 2.3 percent contraction equal to June occurred in a month in which interest rate volatility erupted following the government’s sharp shift in monetary policy in its attempt to stem the devaluation of the peso, which led to more expensive credit for companies.
Since this decline, the year-on-year percentage was 4.3 percent below last December’s figure. The textile sector is the hardest hit by the policy of easing and opening up to imports to generate a sense of lower prices in retail trade, but it has also dealt a significant blow to the national industry.
Activity in the apparel, leather, and footwear sectors plummeted 10.7 percent, also impacted by lower domestic consumption due to the collapse in the population’s purchasing power.
Meanwhile, construction registered a monthly decline of 1.8 percent in July, according to INDEC statistics, due to the strong volatility of the peso against the dollar and high interest rates, which further impacted a sector battered by the halt in public works ordered by the Javier Milei administration.
Summary indicators for construction activity are still 21 percent below November 2023, when the Javier Milei administration took office and ordered the cut in public investment.
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