The global industry is growing, but at moderate rates, in a context of uncertainty and growing challenges. The Uruguayan industry registers low growth.
By Sofia Tuyaré
The global industry faces important challenges in a context of growing global uncertainty. According to a report from the Chamber of Industries of Uruguay (CIU), global industrial production registered annual growth of around 3% to 4% between the end of 2021 and mid-2022, and then the expansion slowed.
For the second quarter of 2024, the indicator increased 2.5% for the year-on-year measurement, and a slight acceleration was observed compared to the previous quarter. In the first quarter of this year, global industrial production grew 1.4%.
Among the factors that the CIU report highlights for the increase in uncertainty are high energy prices, the levels of international interest rates and the inconveniences that may arise in the supply chains of raw materials and products. intermediates.
Year-on-year variation in world industrial production
Source: Own elaboration based on data from the CIU.
Uruguay
The latest data published by the Central Bank of Uruguay (BCU) correspond to the second quarter of 2024. The manufacturing industry decreased 0.5% in the April-June period of this year compared to the same quarter last year, after falling 10.3% in the first quarter of 2024 for year-on-year measurement. The indicator registers five consecutive declines for the interannual measurement.
According to the BCU national accounts report, among the items that performed negatively in this period, the oil refinery activity stands out, as a result of the closure for maintenance of the Ancap plant, which occurred between the third quarter of last year and the second quarter of this year. The dairy products branch also recorded declines in its level of activity, although to a lesser extent. On the opposite side of the street, among the sectors that increased, are the refrigeration industries, the manufacture of wood pulp, pharmaceutical products, and the production of syrups and concentrates.
The National Institute of Statistics (INE) prepares the Physical Volume Index of the manufacturing industry. According to this indicator, in August 2024, the latest data available at the moment, it increased 0.7% compared to August 2023. However, the indicator accumulates a drop of 1% in the first eight months of the year.
According to the INE report, if you analyze the behavior of the items in August of this year compared to the same month of the previous year, the performance is explained by the positive impact, mainly, by the Manufacturing of Paper and Paper Products item, followed by Manufacturing of Pharmaceutical Products and Manufacturing of Chemical Substances and Products. On the other hand, the divisions that registered the greatest negative impact for this period are Manufacturing of Motor Vehicles, Trailers and Semi-trailers, followed by Manufacturing of Beverages and Manufacturing of Rubber and Plastic Products.
Physical Volume Index of the Manufacturing Industry, interannual variation
Source: Own elaboration based on data from the INE.
Employment
The INE prepares, within the framework of its sector report, the Index of Hours Worked (IHT) and the Index of Employed Personnel (IPO). The IHT in August 2024 grew 0.8% compared to the same month of the previous year, and the IPO decreased slightly by 0.2% for the same measurement period.
Expectations
We do not have updated projections regarding the evolution of the level of industrial activity, but the expectations of local analysts regarding the global economy were recently published. Although it is not specific to the sector, it provides information on the projections for the level of activity of the entire Uruguayan economy.
According to the Economic Expectations Survey prepared by the BCU, in October the median of those who respond to the survey predict that the variation in Uruguay’s Gross Domestic Product (GDP) will grow by 3% in 2024, and in 2025 the expansion would slow slightly by 2.5%.
Economist, member of the Consulting department of Carle & Andrioli, independent member firm of GGI Global Alliance
