Manufacturing increased sequentially in November. The IPI manufacturing index rose by 0.4% mom/sa in November, after falling in October. Moreover, industry output rose by 6.1% qoq/sa in the quarter ended in November, following a 9.9% expansion in 3Q24. On an annual basis, manufacturing fell by 1.7% in November, and by 3.2% in the quarter ended in November. All sectors dropped in November on a year-over-year basis, with the exception of food and beverages, and other equipment. According to the INDEC survey, only 19.8% of companies expect an annual increase in internal demand over the next three months, 41.7% expect a decline and 38.5% foresee no changes.
Construction also rose sequentially in November. The construction index increased by 2.2% mom/sa in November, after declining in October. Thus, construction rose by 0.3% qoq/sa in the quarter ended in November (11.2% qoq/sa in 3Q24). Construction activity contracted by 23.6% yoy in November and dropped 24.3% yoy in the quarter ended in November. Employment in the sector contracted by 14% relative to October 2023 (figures have a one-month lag). According to a qualitative survey, 62.2% involved in private construction anticipate no changes in activity levels over the next three months. Meanwhile, 21.8% expect an increase, while 16% anticipate a decline. Among companies primarily engaged in public works, 26% anticipate a decrease in activity levels during the December 2024-February 2025 period, while 53.1% anticipate no change and 20.9% an increase.
Our take: Leading indicators such as manufacturing and construction point to a new sequential expansion in 4Q24. We therefore see upside risks to our GDP growth forecast of -3.0% for 2024.
