Oil refining, one of the few industries that is growing / the Internet
Institute of Applied Economics
Eastern University (UDE)
The latest data on economic activity allow us to reopen the discussion on the state of Argentine industry: are we facing an essentially circumstantial crisis, one typical of the economic present, or has the already existing decline simply accelerated? In this note we will attempt to shed light on this question using short- and medium-term data.
The latest indicators show a stark contradiction between general economic activity and industrial performance. According to the monthly estimate of economic activity for September 2025, the overall economy expanded by 5.0% compared to 2024. Even if we compare with the last year of growth before the current government, 2022, the EMAE shows a growth of 1.9%. However, the industrial component shows the opposite dynamic: -1.0% y-o-y compared to 2024 and -9.9% y-o-y compared to 2022. IPIM’s complementary measure shows practically equal variance: -0.7% y-o-y compared to 2024 and -9.8% y-o-y compared to 2022. This difference between aggregate and manufacturing indicates that the post-recession economic recovery is driven by non-industrial sectors – such as energy, agriculture or industry. Services – while the industry is still underdeveloped and is still not rebuilding to its previous levels.
If we look at the specific branches that declined the most compared to 2022, it is clear that this is not a marginal phenomenon: textile products decreased by -33.9%; Non-metallic minerals – clay, lime, gypsum – -25.7%; Mineral products -25.8%; Machinery and Equipment -20.9% (with a strong impact on appliances and household goods); Rubber and plastic -20.6%. Even the automobile group, which is usually diluted by its merger with Brazil via Mercosur, showed a decline of -9.1%. On the positive side, the only industries growing compared to 2022 are oil refining and motorcycles, suggesting that energy and mobility-related sectors have been able to maintain or even improve their production dynamics.
The most obvious conclusion here is that the model of trade openness, high real interest rates, exchange rate appreciation, and low real income levels is the sole cause of these outcomes. However, it is worth asking whether this is a change in trend, or a deepening of an underlying process.
The variation in gross value added by industrial branch between 2012 and 2022 shows that many of the previously mentioned sectors were already experiencing a long-term decline, at least since 2012. Some notable examples are: rubber and plastics -7.9%; Common metals -14.9%; Cars, trailers and semi-trailers – 16.9%; Electrical machinery and appliances -24.0%; Manufacture of textile products -31.5%; And the clothing industry – 36.4%. This means that we are not facing a sudden collapse in 2024-2025, but rather the deepening of a long cycle of loss of industrial density that has been going on for more than a decade.
The fact is that the recent situation has worsened the situation in the sector, but on an already weak basis. The 2024 and 2025 policy implied opening imports (without reducing taxes), increasing real prices, falling permanent consumption, contracting credit, and an exchange rate that lost relative competitiveness. All of this has particularly affected industrial commodities, whose investment and sales cycles are more sensitive to uncertainty and financial costs.
The data that emerges from this broader reading is that the Argentine industry is facing a double negative: structural trends of volume and productivity loss that have been accumulating for more than a decade, and a recent situational shock that has pressured sales, financing and expectations. Evidence suggests that Argentina’s industrialization was actually declining due to multiple factors: changes in global value chains that placed Asia and Mexico in preferred manufacturing roles; Lack of scale and technological modernization in local factories; and a chronically unstable macroeconomy that discourages long-term investments. The future discussion should revolve around a national strategy that can rebuild competitive production complexes in a world where industrialization will be more difficult than ever without scale, innovation and stability.
The only industries growing compared to 2022 are oil and motorcycles