In the first half of the year, around 10,000 small and medium-sized enterprises closed in Argentina – that is, 55 per day – and if the economic situation continues this way, the same number may close in the second six months of 2024. The alarming data come from the ENAC Empresarios Nacionales para el Desarrollo Argentino think-tank.
“If the economic recession, which is already lasting into the second semester, maintains these levels of depressed activity, the most likely scenario is 10,000 more PyMEs [small and medium-sized firms] lost by the end of the year,” they warned from ENAC.
For the time being, economic activity dropped again in July and recorded a year-to-year 3.9-percent fall, without signs of a bounce-back or recovery for now. However, from consultancy Sarandí they pointed out that without the farm sector’s contribution, the fall could be 8.5 percent.
“There doesn’t seem to be a floor yet. Regardless of some windfall from some activity such as the agricultural, there is still a negative basis compared with last year. There is an overall drop in activity,” Gustavo Cascioti, a member of the executive committee of the APYME (Asamblea de Pequeños y Medianos Empresarios), said to Perfil.
“Ninety-seven percent of the companies producing for the domestic market are PyMEs, the liquidation of income and loss of purchasing power cause the domestic market to fall. The plummeting of sales in all economic sectors make shops earn less and industry supplies shops less.”
The figures of the fall in shop sales go hand in hand with the collapse in consumption levels.
Apyme’s records showed an average 17.5-percent fall in shop sales in basic food basket products such as food and personal hygiene in July. Beverages, in turn, recorded a 20 percent slump and the Cleaning Products sector 25 percent in the seventh month of the year.
Another concern noticed by shopkeepers is the collapse in sales of dairy produce: down 17.5 percent in the first half of the year. They also warned about dairy products being stored without being restocked with the extenuating circumstance that they have sell-by dates.
“The sales data are the worst so far in 2024. There is a deterioration in sales volume with no signs of recovery. I have to go back to 2001, which saw a collapse in the sales of food and beverages,” stated Cascioti.
Hand in hand with consumption, the industrial PyME sector is also affected because it supplies shops which are not selling, and therefore the industry is not producing.
“The economic model this government has chosen is destroying industrial PyMEs,” Julián Moreno, the president of Apyme, told Perfil.
He went on to say: “The increase of all dollarised supplies makes local industries lose any possibility of competing.”
The sector is experiencing a slump in industrial production which may be over 50 percent, according to ENAC.
This week PyMEs invoked the PyME Emergency Law, given the alarming situation they are in and the risk it entails for rising unemployment. Small and medium-sized enterprises account for 65 percent of registered jobs in Argentina.
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