Argentina's industrial output slips 5.7% in May while construction rebounds

The National Institute of Statistics and Censuses (INDEC) reported that the Industrial Production Index (IPI) for manufacturing fell 5.7% year‑on‑year in May 2026, extending a decline that has affected 14 of the 16 surveyed divisions. The sharpest drops were recorded in textiles and apparel (down 26.2% to 18.2% depending on the source), machinery and equipment (‑23.4%), and motor vehicles (‑15.9%). Only petroleum refining (+19.4%) and tobacco products (+14.6%) posted gains.

Cumulatively, production for the January‑May period was 3.1% lower than the same period a year earlier, while the monthly des‑seasonalised index showed a modest 0.4% improvement over April. The construction sector, by contrast, recorded a 4.1% year‑on‑year increase in the Synthetic Construction Activity Indicator (ISAC) and a 6.3% month‑on‑month rise, leading to a 2.5% gain for the first five months of the year. The construction rebound was driven by higher demand for paints, concrete, iron and granite‑type mosaics, despite declines in many other material categories.

Analysts noted that the manufacturing slowdown reflects weaker domestic demand and heightened competition from imports, a situation described as an “effect sandwich” that squeezes profit margins. While construction gains offer a modest boost, the overall outlook remains cautious, with many firms expecting stable activity through June‑August and a minority foreseeing further slowdown.