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Auctions of industrial machinery increase and the future of the sector worries

It is worth remembering that industrial activity was already in decline with 12.8% year-on-year in December and with nine of the 16 manufacturing branches that had closed the 2023 month in the red, according to data from the National Institute of Statistics and Censuses (INDEC). To an already hit industry, after the change of Government, The effect of the devaluation reached him, which quickly translated into a price increase which reached rates of 25.5% in December and close to 20% in January, according to private calculations. This situation puts productive costs under pressure and in check on consumptionwith a collapse in demand for goods and services.

In this context, the consultant Audemus He indicated in a report that he expects a productive blackout with an average drop of 5%, with the most pronounced falls in Construction, Industry and Commerce. “We worked on two scenarios: one optimistic and the other pessimistic. In both, falls are anticipated for 13 of the 16 productive sectors during 2024”warns the report.

Chronicle of an announced crisis

This was already noted by a survey of Argentine Industrial SMEs (IPA), which showed that 78.9% of small and medium-sized companies in the sector expect that, due to the drop in consumption in the midst of the voracious inflationary dynamic, they will go through “a jobs crisis“due to the closure of factories during the first months of the year.

In that context, Ambit He set out to take an x-ray of this vital sector for the economy and national employment and found a dynamic learned from past crises and which, apparently, is in its start-up stage. so the numbers for the second quarter of the year They could be more than alarming and have a very serious consequence: the auction of industrial SMEs.

Auctions of industrial machinery increase

Adrian MercadoCEO and founder of the eponymous firm, explains in dialogue with this medium that after the pandemic they were forced to go through to a 100% online auction model, which generated a notable growth of that dynamic. However, he indicates that it is crucial to highlight that this increase “was not primarily due to a cessation of activities”.

“In fact, 90% of auctions from the beginning of the pandemic until last year “They were carried out for reasons of renovation, equipment and restructuring”with the exception that 10% could have resulted from a total cessation of activity, “maybe 15%”.

However, now they notice a new pattern. With the change of government and the new free import policies there was a notable impact on demand. “The drop in demand in the last month reflects the adaptation of SMEs to the direction that the new government is taking”, says Mercado.

A regrettable change in trend

“SME entrepreneurs, many of whom are over 40 years old, They are already evaluating how to respond to these measures that directly affect their operations”, he assures. And he explains that, in the face of uncertainty and “getting ahead” of government policy, “Some have chosen to tax their industries”.

The trend is reflected in a constant average of one or two daily calls from SMEs interested in appraising their facilities“, says. And, according to the auction business leader, this pattern could accelerate in March, “with the possibility of this increasing to three or four calls per day”.

“SMEs, which previously focused on restructuring and renewing themselves, now face the reality of partial or total layoffs of their activity,” he indicates.

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SMEs have problems projecting their future in the new context.

The key difference from the last four years lies in the transformation of the motivation behind the auctions: Before they were driven by renovation and re-equipmentwhile now they are due to adaptation to the measures promoted by the Government and the drop in demand.

SMEs: the difference between now and the last four years

During the last few years, Mercado explains, the average remained constant between 80, 90 and 100 SMEs that carried out auctions. to renew their machinery due to restructuringre-equipment and other reasons.

As he explains, this pattern has continued over the last four years. These businessmen, who had experienced a period “successful in taking advantage of opportunities during that time period under the previous administrationnow they made the decision to sell strategically.”

However, unfortunately, the situation has changed, and today, selling machinery and installations “It won’t be as beneficial as before.”, which accelerates the dynamics of businessmen to get rid of their industry as soon as possible. “The current reality indicates that it is likely that these sales will be made at a value of approximately 50% of what they were worth last year,” Mercado maintains.

Imminent closure of industrial SMEs

Daniel Rosattopresident of IPA in statements to Ambit, warns that, if this trend continues, they could close “more than 10,000 companies in the coming years, which would have serious consequences for employment and the country’s economy.” The industrial leader asserts that “companies have closed and have been auctioned,” so Mercado’s word serves as a thermometer to really know “what is going to happen and what is happening”.

“If this economic situation we are going through persiststhe closure of companies is going to begin and, without a doubt, the auctions of entire companies are going to accelerate and machinery,” adds the president of IPA. “This is a reality, we have already lived it, So logically there is great fear“, Add.

We know that the conditions are in place for it to happen.because we are talking about something that we already experienced with other governments with similar policies, such as with the government of Carlos Menem and more recently with that of (Mauricio) Macri,” Rosatto exemplifies.

So, “All these factors make us think that we are going down that same path and we have no doubt about what is going to happen,” laments Rosatto. This is because, according to him, “There is no sign from the Government that this could be different“They are saying it openly.” And he warns: “We have no doubt that from now on they can close more than 10,000 companies in one year, in two years, many more,” concludes the industrial leader.

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