What is there in the economy besides a controversy over the reactivation

There are in principle two ways to enter into the controversy about whether the reactivation has already appeared or if it is still slow and stumbling. Both bear the INDEC seal, they measure the evolution of industrial activity, always key even if it comes in decline, and they sing quite different results, if not directly opposite. One compares April 2024 with March 2024 and the other, April 24 against April 23.

The first one says growth of 1.8%, It interrupts six consecutive months with production downhill and, although modest in its magnitude, underpins the Government’s need to proclaim good news that will stretch the population’s endurance in the face of an adjustment that has no intention of stopping in the short term.

Packed, the minister Luis Caputo He went out to capitalize on the data as soon as it was known, on Wednesday, before an auditorium full of businessmen. He said or exaggerated, at the opening of the Latam Economic Forum: “The worst is over. We are in clear recovery. The speed (of the recovery) depends on two things: on the Base Law and on whether we can convince people.”

“We are not going to let you down”, part 2

Already on a culinary level, Caputo advanced with a touch of Menemism from the first hour: “The support of the people is not caviar because I don’t like it, but it is Milanese with fries, and the support is from all social classes. Trust, we are not going to let you down.”

It is worth insisting: people’s support is called patience or a lot of patience.

That day, the backdrop explained a few things that were around the forum and always sound close. mixed rise of the blue dollar and fall in the price of bonds and stocks with the blow of the half sanction to the retirement reform that the opposition, in majority, installed in the Government.

Nothing or very little that serves to feed the official discourse appears in the second part of the INDEC batch, which contrasts April 24 with April 23, that is, the classic of comparing direct data already stripped of seasonal effects. Just as it happens when talking about GDP.

All dyed red, the sample starts with a 16.6% drop in the general index of the manufacturing industry. It is the highest in the series that begins in 2017, except for the 33.2% and 26.2% in April and May 2020, in the middle of the pandemic, and the 21.4% in last March.

More of the same: from end to end, the 16 items that make up the April index are also painted red. In no order, among them we find 40.9% in household goods, such as refrigerators, washing machines and water heaters; 36.5% in agricultural machinery; 39.8 for cement and 26.8% in steel. Finally, the food and beverage division, which has the greatest sectoral weight, recorded a decline of 9%.

Such a panorama already warns that there the true reactivation is still pending. This is also reflected in the levels reached by idle industrial production capacity, that is, unused, both in March 2024 and in the comparison with March 2023.

Again numbers that, although annoying, represent reality better than a bunch of words. And all of them, it is worth insisting, bear the INDEC seal.

That said, what follows for the general level suggests 46.6% idle production on March 24 and 32.7% on March 23. If you prefer, we are close to concluding that almost half of the industry is stopped.

Nothing very different appears within the general picture. In food and beverages the number is 45.5%; 49.2% in the automotive industry and 61.5 for textiles.

Everything speaks, in the end, of fall in demand and consumption in a sector where a survey by the Industrial Union itself reveals that one in four companies reduced their staff and that another 30% plan to do the same.

They are extreme decisions, in a sector where training represents a valuable labor factor and dismissal is usually the last step after going through suspensions, overtime cuts, early vacations and voluntary retirements. In this case, data from private sources add that between 2009 and 2023 Industrial employment fell by a solid 20%.

At this point, something that nests in the controversy about the reactivation asks for a clue, but that surpasses it and even makes it insignificant. It is called unemployment and it spreads consequences that worsen an already much worsened social panorama.

In keeping with the decline in construction, INDEC labor indicators reveal that from March 23 to March 24, 73,100 jobs were lost there. And of them, 52,387 fell between December and March, surely due to the stoppage of public works.

Regarding the same, a very recent official report reveals that State spending on infrastructure fell by a real 81%, discounting inflation, between January and May of this year compared to January-May of 23. This means taking risks and risks one of those known for a structure that does not exactly look in the best conditions.

It is clear, wherever you look, that in addition to adjustment in fiscal accounts and financial juggling, the economy requires a productive plan. And if it is due to reactivation, the reality is that it will materialize the moment it is perceived by the population and modifies those things that alter the population.