Report says sectors outside of agriculture still struggling in Santa Fe, Córdoba, Entre Ríos
A new report focused on the provinces of Santa Fe, Córdoba and Entre Ríos — where some of the biggest winners of Macri’s initial economic reforms reside — illustrates how the country still has a long way to go before achieving a fully rounded recovery, as even in that central region the figures don’t look convincing.
The bet that President Mauricio Macri’s government placed on the country’s most competitive agricultural areas is paying off for the farming sector, but the general economies of those regions are still struggling.
According to analysts from Austral University, both consumption and investment outside of the agricultural hub and its associated activities are showing signs of distress in the provinces, where Macri got his biggest vote diferential in last year’s election.
Supermarket sales amounted to 7.4 billion pesos in the first quarter of the year, but when that value is adjusted for yearly inflation of 35.2 percent, it means that a drop of 8.8 percent in terms of volume was registered.
The drop is leading to a para lysis in the inauguration of new supermarkets and shopping centres too, the report suggests.
Sales in the auto sector also slowed, dropping 1.4 percent, even if the improved profitability of farmers could be seen as likely to incentivize investment in pickup tracks and other larger vehicles.
Concrete sales also seem to suggest that investment is in trouble outside of the agricultural hub, with a 7.6 percent plunge so far this year.
“It is clear that in the central region the devaluation and the cut of export duties for soybean and its derivate products boosted the activity of the oil-producing complex during the first quarter of the year, and that also helped boost transport and the energy sector,” the report said.
But that is where the good news ends, as “other sectors, such as petrochemicals, metalwork, iron and steel have struggled due to the fall in exports to Brazil and the drop in demand from the construction sector.”
Not all of the farmers are doing well, however. Dairy production fell by 2 percent on the first quarter, as farmers continue to protest low prices and demand government subsidies despite having what they view as an ally in place, Agriculture Minister Ricardo Buryaille.
There was also a drop in cow slaughters, down by 4.9 percent overall, but the report suggests that cattle-raising is overall slightly better-off, compensated by an uptick in the key poultry sector.
In fact, the drop in cow slaughters can even be read positively, as analysts have been reporting that it is explained by a bet to increase breeding and boost long-term production now that regulations are expected to favour the sector.
The positives
The standout positive, of course, was large-scale agriculture and its related agroindustries.
Industrial production of soybean was up by a staggering 83.3 percent, with Santa Fe province leading the way.
The impressive figures can be explained by the sale of grain stocks which were being hoarded previously, however. For longer-term growth, an improved sowing season would need to take place first.
Wheat and corn are expected to lead the way, as the government has eliminated all the taxes on exports for those two key crops.
Yesterday, the ASAGIR association of oilseed producers also said that it expected production to be up by 35 percent this year following the elimination in export duties, despite fighting hostile weather due to the La Niña effect.
The boost to agriculture also resulted in more fuel sales, with premium gasoil’s 15.8-percent uptick leading the way.
Recent reports from economic consultancies have shown that only in these provinces is fuel consumption growing, as price hikes and reduced demand take their toll on transportation elsewhere.
The financial sector in the Central region is also looking healthier, the Austral report said, as bank deposits have bounced back.
Amid a generalized drop in consumption, a strange outlier was movie tickets, up by 76 percent in March on the yearly comparison, but analysts suggested this could be explained by the early Easter holidays, which brought some heavyweight premieres forward when compared to last year’s schedule.
Herald staff
A new report focused on the provinces of Santa Fe, Córdoba and Entre Ríos — where some of the biggest winners of Macri’s initial economic reforms reside — illustrates how the country still has a long way to go before achieving a fully rounded recovery, as even in that central region the figures don’t look convincing.
The bet that President Mauricio Macri’s government placed on the country’s most competitive agricultural areas is paying off for the farming sector, but the general economies of those regions are still struggling.
According to analysts from Austral University, both consumption and investment outside of the agricultural hub and its associated activities are showing signs of distress in the provinces, where Macri got his biggest vote diferential in last year’s election.
Supermarket sales amounted to 7.4 billion pesos in the first quarter of the year, but when that value is adjusted for yearly inflation of 35.2 percent, it means that a drop of 8.8 percent in terms of volume was registered.
The drop is leading to a para lysis in the inauguration of new supermarkets and shopping centres too, the report suggests.
Sales in the auto sector also slowed, dropping 1.4 percent, even if the improved profitability of farmers could be seen as likely to incentivize investment in pickup tracks and other larger vehicles.
Concrete sales also seem to suggest that investment is in trouble outside of the agricultural hub, with a 7.6 percent plunge so far this year.
“It is clear that in the central region the devaluation and the cut of export duties for soybean and its derivate products boosted the activity of the oil-producing complex during the first quarter of the year, and that also helped boost transport and the energy sector,” the report said.
But that is where the good news ends, as “other sectors, such as petrochemicals, metalwork, iron and steel have struggled due to the fall in exports to Brazil and the drop in demand from the construction sector.”
Not all of the farmers are doing well, however. Dairy production fell by 2 percent on the first quarter, as farmers continue to protest low prices and demand government subsidies despite having what they view as an ally in place, Agriculture Minister Ricardo Buryaille.
There was also a drop in cow slaughters, down by 4.9 percent overall, but the report suggests that cattle-raising is overall slightly better-off, compensated by an uptick in the key poultry sector.
In fact, the drop in cow slaughters can even be read positively, as analysts have been reporting that it is explained by a bet to increase breeding and boost long-term production now that regulations are expected to favour the sector.
The positives
The standout positive, of course, was large-scale agriculture and its related agroindustries.
Industrial production of soybean was up by a staggering 83.3 percent, with Santa Fe province leading the way.
The impressive figures can be explained by the sale of grain stocks which were being hoarded previously, however. For longer-term growth, an improved sowing season would need to take place first.
Wheat and corn are expected to lead the way, as the government has eliminated all the taxes on exports for those two key crops.
Yesterday, the ASAGIR association of oilseed producers also said that it expected production to be up by 35 percent this year following the elimination in export duties, despite fighting hostile weather due to the La Niña effect.
The boost to agriculture also resulted in more fuel sales, with premium gasoil’s 15.8-percent uptick leading the way.
Recent reports from economic consultancies have shown that only in these provinces is fuel consumption growing, as price hikes and reduced demand take their toll on transportation elsewhere.
The financial sector in the Central region is also looking healthier, the Austral report said, as bank deposits have bounced back.
Amid a generalized drop in consumption, a strange outlier was movie tickets, up by 76 percent in March on the yearly comparison, but analysts suggested this could be explained by the early Easter holidays, which brought some heavyweight premieres forward when compared to last year’s schedule.
Herald staff
