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Activity and employment crisis: which are the most affected sectors and what is projected for March - Infobae
Source:
www.infobae.com
February 21, 2024
The sharp drop in demand recorded in January is being repeated, in some cases more seriously, in February. How does this scenario affect workers and companies' search to increase their expo
By Natalia Donato
The National Department of Statistics of Colombia (DANE) reported that Colombia's manufacturing production in August 2021 increased by 22.9% compared to the same month of the previous year. In the image an archive record of an operator in a metalworking industry, in Manizales (Colombia). EFE/Christian Escobar
The summer heat failed to temper the coldness that the economy has been experiencing since the end of last year. On Thursday, Indec will release economic activity data for December and it is assumed that they will be negative, even worse than those of November, when the Monthly Estimator of Economic Activity (EMAE) showed not only interannual but also monthly declines. But it is already mid-February and what worries businessmen is that the January data recorded drastic falls, between 30% and 40% year-on-year , and the same trend applies to the second month of 2024. Worse still, no one believes that the situation begins to reverse in March.
In this context, the companies' strategies are varied, but what most anticipate is that if this scenario of retraction in demand persists for several months, employment will be severely affected.
For now, it is only a matter of reducing overtime, shifts and outsourced workers, as well as advancing vacations and some suspensions, but companies are analyzing all possible alternatives, and layoffs, in this context, are just around the corner. corner. The latest survey carried out by the UIA, with January data collected in February, shows, according to sources from the entity to Infobae , that although more companies responded that employment fell than those that said it rose, the majority of The employers responded again – like the previous survey – that they maintained the payroll of workers.
On Thursday, Indec will release economic activity data for December and it is assumed that they will be negative, even worse than those of November.
The survey, which will be released in the coming weeks, also reflects that the main concern of industrialists today is the level of activity and financing, that is, how to face the recession. Furthermore, most believe that today is not a good time to invest. “
The data for January is not closed, but it is all in red. It may be quite similar to December. Compared to February, we are seeing that there is quite a contraction, a drop in VAT collection is evident; "They are going to be hard months until April," they said at the headquarters chaired by Daniel Funes de Rioja .
Faced with the impact that the December devaluation had on prices, added to the recomposition of all relative prices that accumulated significant arrears – the regulated ones, especially –, income is left behind and this quickly translates into a brake on consumption . Retail sales plunged 28% in January; car registrations, 33%; the sale of clothing and footwear, between 30% and 40%; The same thing happened to stores selling electrical appliances; cement shipments had a contraction of 20%, and the list goes on. Merchants turn around and buy less from manufacturers, who also report production declines of around 30% on average.
Today several automotive terminals are stopped due to lack of parts and would resume production in March, although they are still analyzing how much less they will produce in the market context.
“The year can give, on average, a 30% drop in units, depending on the numbers we are analyzing. Activity has been slow, orders are not being placed and it is very difficult to meet the commitments made. The brands want to lower the winter orders that were placed from October, so the outlook is quite pessimistic,” said the head of the Pro Tejer Foundation, Luciano Galfione .
Regarding the impact on employment, another source consulted pointed out that “there are suspensions, but it is not yet something massive, much less layoffs.” “It is very difficult for the textile sector to rehire personnel when activity recovers, in addition to the fact that the cost of compensation is very high. In any case, if activity does not begin to move a little in the short term, this scenario is going to deepen,” remarked the textile businessman.
From the metallurgical sector, meanwhile, they highlighted that significant falls are reflected in some sectors, those linked to the steel industry or the automotive sector – which is practically stopped –, but that those linked to energy are with a good level of activity.
The president of the Argentine Industrial Union (UIA), Daniel Funes de Rioja (EFE/Alejandro Bolívar/File)
In this regard, Acindar sources confirmed to this medium that “the drop in the level of activity is around 30%” and that “it is worrying because it is a company with many employees.” This was the case in January and February maintains the same trend, they said in the company, while explaining that sales of steel for construction are affected – due to the seasonal period but also due to the market situation, with the brake on public works – and industrial steel, which is sold to different industries for their production processes.
“In February a drop similar to that of January or even greater is expected. And in March it will be seen, but we do not see it starting to lift. The question is whether it gets worse or is sustained. In this context, production is being adjusted to the new level of demand – prices in dollars remained the same – and we are trying to export more to preserve personnel,” said the steel company source. In any case, she specified that what was reduced is the outsourced staff, for example, to do maintenance tasks. Now, that work is done by the same workers who have less work.
The president of the Industrial Union of the Province of Buenos Aires (UIPBA), Martín Rappallini , is the owner of Cerámica Alberdi and according to what he reported, sales in his company fell 25% in January compared to the same month of the previous year. In February, he said, the same trend continues, although with a slight improvement (this month's drop, so far, is around 22%); and he stated that they are exporting much more and that was why the drop was not greater. From having a percentage of sales abroad of between 15% and 20%, today it rose to 20/25 percent.
In the case of the automotive sector, several terminals such as General Motors, Nissan, Renault and Volkswagen are currently not producing or are doing so partially due to lack of supply of parts - the supply of parts as a result of the debt accumulated with suppliers of the sector has not yet been resolved. abroad–, but when they return –it is expected to happen in March–, they will return with a drop in production, since although they export a lot, the domestic market collapsed. And this rearrangement will be transferred to the auto parts sector, with the consequences that it will generate in employment.
The world of food is also affected by the fall in consumer purchasing power, although not with such pronounced declines because it is an area with a more inelastic demand. In fact, the sale of mass consumption products fell 3.8% in January, according to the latest data from the consulting firm Scentia – in the chains, the contraction was 8% – and the preliminary February data are also negative, at less on the modern channel.
“We see a short but deep recession. The economy will hit the bottom towards the start of the second quarter and a tepid recovery will begin, initially driven by agriculture, starting in April. Then, it will gain more momentum towards the third quarter thanks to a recovery in the margin of the wage bill in real terms,” said Abeceb economist Natacha Izquierdo .
The consulting firm foresees a drop in GDP of 4.1%, which would rise to 7% if agriculture were excluded. Regarding the sectors with better prospects, he mentioned the most tradable, such as oil and gas, mining, agriculture and the knowledge services sector, while those most affected will be construction, semi-durable goods, such as household appliances. , and retail trade.
Source:
Crisis de actividad y empleo: cuáles son los sectores más afectados y qué proyectan para marzo
La fuerte caída de demanda registrada en enero se está repitiendo, en algunos casos con más gravedad, en febrero. Cómo afecta ese escenario a los trabajadores y la búsqueda de las empresas de aumentar sus exportaciones
www.infobae.com
February 21, 2024
The sharp drop in demand recorded in January is being repeated, in some cases more seriously, in February. How does this scenario affect workers and companies' search to increase their expo
By Natalia Donato
The National Department of Statistics of Colombia (DANE) reported that Colombia's manufacturing production in August 2021 increased by 22.9% compared to the same month of the previous year. In the image an archive record of an operator in a metalworking industry, in Manizales (Colombia). EFE/Christian Escobar
The summer heat failed to temper the coldness that the economy has been experiencing since the end of last year. On Thursday, Indec will release economic activity data for December and it is assumed that they will be negative, even worse than those of November, when the Monthly Estimator of Economic Activity (EMAE) showed not only interannual but also monthly declines. But it is already mid-February and what worries businessmen is that the January data recorded drastic falls, between 30% and 40% year-on-year , and the same trend applies to the second month of 2024. Worse still, no one believes that the situation begins to reverse in March.
In this context, the companies' strategies are varied, but what most anticipate is that if this scenario of retraction in demand persists for several months, employment will be severely affected.
For now, it is only a matter of reducing overtime, shifts and outsourced workers, as well as advancing vacations and some suspensions, but companies are analyzing all possible alternatives, and layoffs, in this context, are just around the corner. corner. The latest survey carried out by the UIA, with January data collected in February, shows, according to sources from the entity to Infobae , that although more companies responded that employment fell than those that said it rose, the majority of The employers responded again – like the previous survey – that they maintained the payroll of workers.
On Thursday, Indec will release economic activity data for December and it is assumed that they will be negative, even worse than those of November.
The survey, which will be released in the coming weeks, also reflects that the main concern of industrialists today is the level of activity and financing, that is, how to face the recession. Furthermore, most believe that today is not a good time to invest. “
The data for January is not closed, but it is all in red. It may be quite similar to December. Compared to February, we are seeing that there is quite a contraction, a drop in VAT collection is evident; "They are going to be hard months until April," they said at the headquarters chaired by Daniel Funes de Rioja .
What are the most and least committed sectors?
The items oriented to the domestic market are, naturally, the most affected by this recessive scenario, explained by the high levels of inflation and the fall in real wages.Faced with the impact that the December devaluation had on prices, added to the recomposition of all relative prices that accumulated significant arrears – the regulated ones, especially –, income is left behind and this quickly translates into a brake on consumption . Retail sales plunged 28% in January; car registrations, 33%; the sale of clothing and footwear, between 30% and 40%; The same thing happened to stores selling electrical appliances; cement shipments had a contraction of 20%, and the list goes on. Merchants turn around and buy less from manufacturers, who also report production declines of around 30% on average.
Today several automotive terminals are stopped due to lack of parts and would resume production in March, although they are still analyzing how much less they will produce in the market context.
“The year can give, on average, a 30% drop in units, depending on the numbers we are analyzing. Activity has been slow, orders are not being placed and it is very difficult to meet the commitments made. The brands want to lower the winter orders that were placed from October, so the outlook is quite pessimistic,” said the head of the Pro Tejer Foundation, Luciano Galfione .
Regarding the impact on employment, another source consulted pointed out that “there are suspensions, but it is not yet something massive, much less layoffs.” “It is very difficult for the textile sector to rehire personnel when activity recovers, in addition to the fact that the cost of compensation is very high. In any case, if activity does not begin to move a little in the short term, this scenario is going to deepen,” remarked the textile businessman.
From the metallurgical sector, meanwhile, they highlighted that significant falls are reflected in some sectors, those linked to the steel industry or the automotive sector – which is practically stopped –, but that those linked to energy are with a good level of activity.
The president of the Argentine Industrial Union (UIA), Daniel Funes de Rioja (EFE/Alejandro Bolívar/File)
In this regard, Acindar sources confirmed to this medium that “the drop in the level of activity is around 30%” and that “it is worrying because it is a company with many employees.” This was the case in January and February maintains the same trend, they said in the company, while explaining that sales of steel for construction are affected – due to the seasonal period but also due to the market situation, with the brake on public works – and industrial steel, which is sold to different industries for their production processes.
“In February a drop similar to that of January or even greater is expected. And in March it will be seen, but we do not see it starting to lift. The question is whether it gets worse or is sustained. In this context, production is being adjusted to the new level of demand – prices in dollars remained the same – and we are trying to export more to preserve personnel,” said the steel company source. In any case, she specified that what was reduced is the outsourced staff, for example, to do maintenance tasks. Now, that work is done by the same workers who have less work.
The president of the Industrial Union of the Province of Buenos Aires (UIPBA), Martín Rappallini , is the owner of Cerámica Alberdi and according to what he reported, sales in his company fell 25% in January compared to the same month of the previous year. In February, he said, the same trend continues, although with a slight improvement (this month's drop, so far, is around 22%); and he stated that they are exporting much more and that was why the drop was not greater. From having a percentage of sales abroad of between 15% and 20%, today it rose to 20/25 percent.
In the case of the automotive sector, several terminals such as General Motors, Nissan, Renault and Volkswagen are currently not producing or are doing so partially due to lack of supply of parts - the supply of parts as a result of the debt accumulated with suppliers of the sector has not yet been resolved. abroad–, but when they return –it is expected to happen in March–, they will return with a drop in production, since although they export a lot, the domestic market collapsed. And this rearrangement will be transferred to the auto parts sector, with the consequences that it will generate in employment.
The world of food is also affected by the fall in consumer purchasing power, although not with such pronounced declines because it is an area with a more inelastic demand. In fact, the sale of mass consumption products fell 3.8% in January, according to the latest data from the consulting firm Scentia – in the chains, the contraction was 8% – and the preliminary February data are also negative, at less on the modern channel.
“We see a short but deep recession. The economy will hit the bottom towards the start of the second quarter and a tepid recovery will begin, initially driven by agriculture, starting in April. Then, it will gain more momentum towards the third quarter thanks to a recovery in the margin of the wage bill in real terms,” said Abeceb economist Natacha Izquierdo .
The consulting firm foresees a drop in GDP of 4.1%, which would rise to 7% if agriculture were excluded. Regarding the sectors with better prospects, he mentioned the most tradable, such as oil and gas, mining, agriculture and the knowledge services sector, while those most affected will be construction, semi-durable goods, such as household appliances. , and retail trade.
