Summary of the Argentine โคindustrial Crisis – January 2025
This article โขdetails the significant struggles facing Argentine industry, notablyโ under the firstโ year and โฃa half of President Milei’s administration. Here’sโค a breakdown of the key points:
1. Widespread Business Closures & Job Losses:
* More companies have closed thanโค opened in Argentina since Mileiโข took office (17,063 net loss, averaging 28โ perโ day).
* This hasโ resulted in a loss of 236,845 jobs.
* Constructionโ and manufacturing are the hardest-hit sectors, remaining considerably below 2023 averages.
2. Rising Crisis Prevention Processes (PPC):
* Companies are increasingly utilizing PPCs (aimed at avoiding โlayoffs/suspensions) – 143 inโ the first ten months ofโ 2025, exceeding โthe total โfor 2024โฃ and reaching levels not seen since 2018-2019.
3.โ Echoes of the 1990s:
* The โcurrent crisis is being compared โtoโค theโ 1990s,โ when opening โimports led to the closure of many domestic companies unable to compete.
* โ The head โขof the Argentine industrial Union (UIA), Martรญn Rappallini, acknowledgesโค the need for โArgentina toโค compete globally โขbut stresses the needโ for policies to address cost disadvantages.
4. High Production Costs:
* โข โฃ Producing in Argentina is 25-30% more expensiveโ thanโ in Brazil due toโฃ tax pressure,โ infrastructure deficiencies, and labor legislation.
* Installed capacity in manufacturing is lowโ (61.1% in September), almost matching pandemic levels.
5. Textile โSector โคin Crisis:
* โฃ โThe textile sector is particularly vulnerable, operating at onyl 44.4% of capacity.
* โขIt’s struggling to compete with โคcheap clothing imports from โขChina, facilitated by onlineโฃ platforms likeโ Temuโข and Shein, frequently enough entering the country without taxes.
* Approximately 15,000 formal jobs have been lost โฃinโ the textile industry.
6.consumer Behavior & โconsequences:
* Argentinesโข are โฃenthusiastically embracing online shopping โฃfor cheaper goods, but this is contributing to job โฃlosses in domestic โฃindustries, particularly small andโ medium-sizedโ businesses.
7. Government Plans & Outlook:
* milei plans labor and taxโ reforms intended to benefit businesses.
* However, the article suggests that without anโ increase in consumerโฃ purchasingโ power, the difficultiesโ faced by manufacturers โคwill persist.
In essence, the article paints a โpicture of a struggling Argentine industry โgrappling with economicโ policies, global competition, and internal cost disadvantages, โleading โto business closures, job losses, and a sense ofโฃ crisis reminiscent of past economic challenges.
