Industry activity in March registers first Y-o-Y rise in nine months

The Argentine industry showed signs of improvement in March, with its first year-over-year increase in nine months: a 5% rise.  Activity also rose 3.2% month-over-month, according to the Industrial Production Index (IPI) published on Thursday by statistics institute INDEC. This positive data helped offset the losses that Argentinas industrial sector had recorded at the start of the year. Between January and February, the cumulative decline was 6% compared to the same period in 2025.  With the March data, that decline narrowed to just -2.3%. The still-negative quarterly cumulative figure confirms that the recovery is uneven and still fragile, Santiago Casas, chief economist at EcoAnalytics, told the Herald.  Under President Milei, local industry has experienced a sharp decline in activity, driven by the depreciation of purchasing power and the deregulation of imports a combination that has hit a sector historically focused on the domestic market hard. From November 2023 the month Milei took office through March 2026, the IPI, as measured by INDEC, shows a 4% decline, with significant disparities across sectors.  A growth with caveats The sectors that showed the strongest growth in March were tobacco products, with a 28.2% increase, driven by the processing of tobacco leaves. This was followed by chemicals and chemical products, with a 15.9% increase. However, much of this was due to a weather-related event that occurred in March 2025.  At that time, floods on March 7 in the city of Baha Blanca the countrys petrochemical hub caused a lack of natural gas supply that brought the main petrochemical plants to a standstill. As a result, production of basic chemicals fell by 31.8% compared to March 2024. Also notable was oil refining, driven by the Vaca Muerta boom, which rose 13.5%, and the wood, paper, publishing, and printing sector (+12.8%), a result of the start of the school year.  Industries in the red The report also showed sharp declines. The textile industry fell by 23.3% in March, totaling a 27.1% plunge so far this year due to competition from imported products and a drop in domestic consumption.  Clothing, leather, and footwear also declined, with an 8.9% drop in March.  Machinery and equipment manufacturing experienced a similar situation, falling 11.3% in March, affected mainly by lower production of agricultural machinery (14.7%), washing machines, and refrigerators (16.2%). Basic metal industries were among the hardest hit: a 10.1% decline in the overall March average, with the steel industry falling 14.7% that month.  In a recent statement, the Argentine Chamber of Steel warned of weak domestic demand and import pressure, especially from China, the worlds largest steel producer.  Mixed cases The automotive industry grew 7.6% year-over-year in March, partly due to an increase in exports to Brazil, which rose 10.4% during that period.  However, vehicle manufacturing has accumulated a 13.0% year-to-date decline. Similarly, agricultural machinery production has accumulated a 26.8% drop year-to-date, a sign of cooling investment in the agricultural sector. On the other hand, improvement in construction activity drove growth in some industrial sectors compared to March 2025: cement (+13.6%), cement and plaster products (+12.3%), and wood and wood products (+25.8%). It was also reported this Thursday that the construction sector showed a much stronger recovery. The sector grew 4.7% month-over-month and posted a 12.7% year-over-year increase, consolidating the rebound it has been showing since last years lows. The [industrial] sector still alternates between gains and setbacks without managing to establish a sustained growth trend. The normalization of credit could become one of the factors that finally unlocks that dynamic, said Casas.