Argentina’s construction sector posted its largest monthly decline of last year after crucial midterm elections, while the country’s manufacturing industry also saw activity slow.
Construction activity fell 4.1 percent in November compared to October, and industrial production dropped 0.6 percent on the same basis. Both sectors also declined annually in November, according to government data published by the INDEC national statistics bureau Thursday. November economic activity has yet to be posted by the statistics agency.
Argentina was rocked by a currency sell-off in the weeks leading up to the October 26 midterm vote as investors braced for a possible return of Milei’s leftist rivals. The tumult calmed after Milei won the election by a landslide.
While the steep fall in construction may have been a direct response to the election, manufacturing responds to deeper-seated paradigm shift under President Javier Milei that favoirs imports over local production in less competitive areas, according to Sebastián Menescaldi, director of EcoGo economic consultancy.
“Everyone expected a change in the currency policy, so construction companies likely bought material ahead of time, expecting a price jump in the future, so in November they already had the materials they needed,” Menescaldi said. “Manufacturing is being more seriously affected by the paradigm shift where certain industries can no longer compete and will have to reconvert.”
Manufacturing, which includes everything from oil refinery and foods to textiles, fell month-on-month in five of the last six months. Construction has been one of the hardest hit by Milei’s rise to power because the libertarian halted all public works. Manufacturing and construction have led job losses among industries under Milei.
by Patrick Gillespie & Manuela Tobias, Bloomberg
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