Manufacturing increased sequentially in December. The IPI manufacturing index rose by 0.2% mom/sa in December, marking the second consecutive increase. Moreover, industry output rose by 1.5% qoq/sa in 4Q24, following a 10.4% expansion in 3Q24. On an annual basis, manufacturing rose by 8.4% in December, and by 1.2% in 4Q24. All sectors grew in December on an annual basis, except for wood, paper and metals. According to the INDEC survey, 26.8% of companies expect an annual increase in internal demand over the next three months, 33.3% expect a decline and 39.9% foresee no changes.
Construction also increased sequentially in December. The construction index rose by 3.1% mom/sa in December, marking the second consecutive increase. Thus, construction fell by 1.1% qoq/sa in 4Q24 (+11.0% qoq/sa in 3Q24). Construction activity contracted by 10.2% yoy in December and dropped 20.6% yoy in 4Q24. Employment in the sector contracted by 13% relative to November 2023 (figures have a one-month lag). According to a qualitative survey, 63.5% involved in private construction anticipate no changes in activity levels over the next three months. Meanwhile, 22.6% expect an increase, while 13.9% anticipate a decline. Among companies primarily engaged in public works, 21.9% anticipate a decrease in activity levels during 1Q25, while 58.3% anticipate no change and 19.8% an increase.
Our take: Leading indicators such as manufacturing and construction point to another sequential expansion of the GDP proxy in December (to be released on February 25). We expect GDP contracted by 2.6% in 2024 (with risks titled to a smaller contraction), followed by a bounce back to a 4.5% expansion in 2025.
