July 23, 2014
Gov’t meets with UIA to address stagnation
Following INDEC report revealing industrial output dwindled in first quarter
Economy Minister Axel Kicillof will meet with high-ranking members of the Argentine Industrial Union (UIA) chamber, led by Héctor Méndez, today to discuss the state of and projections for the sector, with the encounter coming three days after the INDEC national statistics bureau confirmed industrial production to have stagnated in the first quarter of the year.
Another issue on the agenda will be the new Informative Pricing Regime, a scheme introduced via a Trade Secretary resolution, whereby industrial companies that saw revenue above 183 million pesos and logistics firms with revenue greater than 250 million pesos are obliged to inform the government about prices, volume of products sold as well as information on costs and staff for the December to March period.
Published in March, several business leaders questioned whether the resolution breached existing confidentiality regulation.
Kicillof will have lunch with the UIA representatives at 1.30pm at the Economy Ministry, and both parties will be seeking to set out policies and measures to kick-start activity.
Industrial production plunged six percent in March compared to the same month last year, and dropped 1.8 percent compared to February, accumulating six consecutive months of declining output, according to INDEC. So far this year, industrial production has dropped 3.1 percent, 0.2 percent less than the same period last year.
Most of the industrial production areas registered a dip in March, headed by a 20.7 percent drop in vehicle production. The trend was followed by oil refineries, by 20.7 percent, tobacco production, by 10.4 percent, rubber and plastic production, by 3.1 percent and chemical production, by 2.5 percent.
A less significant reduction was registered in food production, which dwinded 0.4 percent, explained by a 24.3 percent drop in sugar output and a 3.7 percent drop in dairy products. At the same time, paper and cardboard production also dropped 0.7 percent.
On the other hand, the iron and steel industry grew 0.4 percent, accumulating a 9.8 percent quarterly expansion. Steel production rose 0.2 percent in March, while aluminum production grew 1.1 percent. The other sector to register improvements last month was textiles, which grew 6.5 percent in March and accumulates so far this year a 7.4 percent expansion.
According to a survey carried out by the INDEC, no major changes will be registered on industrial production in the second quarter of the year.
Funding for small- to medium-sized companies, an extension of debt repayment plans, and the effect of inflation on production costs will also be on the table for discussion.
Herald with Télam, DyN