Argentine consumption falls for sixth consecutive month in May

Private consumption continued its drop rate in May, falling 0.3% month-on-month and 2.2% year-on-year, marking its sixth consecutive annual decline, according to a report by the University of Palermo (UP). In the first five months of 2026, the cumulative drop reached 1.8%. Against this backdrop, supermarkets and wholesale retailers identified a lack of demand as the primary obstacle to expanding their activity, according to the latest Business Trend Survey by statistics institute INDEC. Mass consumption continues its downward trend, led by beef sales, which have contracted for 10 consecutive months, falling 13% year-on-year in April. While poultry sales declined 2.5%, pork sales saw growth, rising 6.2% year-on-year in April and 11% in the first four months of the year. Shrinking demand On Thursday, INDEC reported that 62.6% of supermarkets and wholesale stores pointed to demand as the main factor limiting commercial activity. This concern has deepened since three months ago, when the figure stood at 54.5%.  The diagnosis is also reflected in the perception of the current situation. A third of the firms (33%) rated their business situation as “bad,” while only 6.6% considered it “good.” The balance between positive and negative responses resulted in a net negative of -26.4%. Business owners show slight optimism for the future, though they do not expect a significant recovery. While 18.7% believe business will improve during the June-August quarter, 12.1% anticipate a worsening, and nearly seven out of 10 companies expect the scenario to remain unchanged. Cooling indicators and durable goods Household spending indicators tracked by the UP show further signs of cooling. Real VAT (IVA) collection fell 3% year-on-year in May, while credit card purchases recorded a 3.5% real decline the first such drop since the recovery following the 2024 recession began. The durable goods sector showed mixed results, as motorcycle registrations grew 26% year-on-year in May, though the pace is slowing. Automobile registrations, meanwhile, fell 26.2% compared to May 2025, their fourth decline of the year.  Bagged cement shipments, an indicator linked to small-scale construction, fell 8.3% in May, accumulating a 8.9% drop so far in 2026. Recreation and tourism also showed signs of retreat after a brief expansion in the first two months of the year. Consumption in traditional Buenos Aires City restaurants fell 2.9% year-on-year in April, while cinema attendance and food court consumption in shopping centers both plummeted by approximately 20% in March. Fewer orders, caution on hiring According to the INDEC survey, just 2.2% of supermarkets expect to increase the volume of orders placed with suppliers over the next three months, while 15.4% anticipate cutting back and 82.4% believe order volumes will remain unchanged. Employment prospects also show little sign of expansion. Only 1.1% of companies expect to hire additional staff, compared to 18.7% that foresee workforce reductions. Against this backdrop, the sector’s business confidence indicator remained in negative territory at -4%, reflecting that improving expectations have yet to offset the weakness companies are currently experiencing. Originally published in mbito