Santa Fe: the economic recession is felt in consumption

“Last February, all the indicators that make up the Composite Index of Economic Activity of Santa Fe continued to register negative monthly variations. On a year-on-year basis, only the set of registered jobs remains on the rise, compared to February 2023. “.

The paragraph belongs to the latest report from the Center for Studies and Services of the Santa Fe Stock Exchange, directed by Lucrecia D’Jorge and coordinated by Pablo Cohan. The document details that “the representative series of supermarket sales in the province of Santa Fe (large stores) registered the fifth negative monthly variation in February, in this case -1.5%.”

The report clarifies that this series is linked to retail consumption in the province, it grew until September 2023 despite the recessive context. “However, the accumulated decline in recent months caused a year-on-year decline of -5.4% in February, placing the indicator 30.0% below the maximum peak reached in 2015, a period from which it indicates a downward trend”.

It later states that “registered jobs (new registrations) decreased by 0.3% during February, although they remain in positive territory in the interannual comparison, accumulating 2.1%. Registered employment in the private sector has been five Consecutive months of falls, for its part, the set of real remunerations of registered employees in the province sharpened the pace of year-on-year decline (-17.6% between February 2024 and February 2023), marking a loss of purchasing power. 3.9%, only between January and February 2024.

“Business expectations to increase personnel (labor demand) continue with a negative trend. The monthly exchange rate was -5.4% and the accumulated annual rate was -54.4%. It should be noted that this series, which has been leveraging recession from the beginning, regularly presents a greater volatility and amplitude than that corresponding to the rest”.

Regarding the registration of new vehicles in the province, the CES details that “it once again presented a monthly drop, which in February was -1.4%, reducing the rate in relation to previous months. Meanwhile, the interannual decrease was – 21.7%. It is highlighted that the series is at historic lows, within the framework of a context marked by difficulties in the marketing process and limited access to credit.

“Another indicator of investment in durable goods, cement consumption in the province, representative of the construction sector, obtained variations of -6.6 and -28.2% monthly and interannual, respectively, in February. This occurs in a context of restriction of funds allocated to national public works in provincial territory, which directly impacts the sector’s labor market.”

Regarding the representative series of provincial tax resources, “it showed its eighth consecutive negative monthly variation in February, with -1.0%, while the interannual variation continues to accentuate downwards (-10.0%). It should be noted that, in the last two months, the drop in total resources comes fundamentally from the decrease in national co-participation (which represents the majority of the total available resources), while provincial tax collection showed some recovery.”

Santa Fe factory production was in negative territory in February, with falls of -1.3 and -11.3%, monthly and year-on-year, respectively, according to Icasfe.

“The consumption of industrial electricity in the province of Santa Fe showed an incipient recovery between December 2023 and February 2024. The push came from some sectors of the agribusiness, which have rebounded after hitting rock bottom as a result of the drought that characterized the 22/23 agricultural campaign. Meanwhile, the interannual variation was -2.7%.

“In this sense, the milling of oilseeds presented a marked recovery during the first quarter of 2024, accumulating an increase of 17.0% in the first three months of the year. In March 2024, in the provincial territory, they were destined for milling about 500,000 tons more compared to February.”

Hydrocarbon consumption in the province of Santa Fe (excluding gasoline and fuel oil) “experienced an incipient improvement in February, marking a slightly positive seasonally adjusted monthly rate of around 0.5%. Meanwhile, in the interannual comparison, after two consecutive months of slightly negative figures (December and January), grew by 2.0%. For its part, the industrial gas consumption series in the province of Santa Fe also presented a slight monthly increase in February, of 1.2. %, and a drop compared to February 2023, of -4.2%.

“Santa Fe dairy production has accumulated an interannual decrease of around -12.1% since February of last year, in the face of an adverse climate context and an unfavorable price-input scheme that ended up negatively impacting the performance of dairy farms in the region. Particularly, the seasonally adjusted rate in February 2024 was -1.2%.

Bovine slaughter marked the second consecutive monthly drop, of 2.9%, in “a context of restrictions, increased costs and decreased demand” that precipitated a year-on-year drop of 6.1%. For pig slaughter, the rates were -1.6 and -4.0%, respectively.

“With data as of March 2024, the production of agricultural machinery in the province of Santa Fe presented a monthly rate of -7.1% (12th monthly variation in negative territory). In the interannual comparison it maintains the same trend, registering negative variations during the last 19 months (since September 2022), thus reaching an interannual rate of -44.6%”.

“The interannual variation rate of the ICASFe was -8.5% in February 2024, which places it at a value similar to that registered in May 2020. In other words, the interannual rate of decline would be similar to that recorded in full ASPO period due to the COVID-19 pandemic”.

With data from the second month of the year, the CES/BCSF highlights “the collapse of retail consumption in the last five months, measured by sales in supermarkets. Consumption indicators are constituted as clearly coincident components of economic activity, by definition.

“In the specific case of the economy of the province of Santa Fe, in the nine recessions dated from 1994 onwards, this premise had been met. However, although the current recession began in May 2022, until “In the middle of last year, consumption had remained in positive territory, encouraged by short-term policies, and by consumers’ need to anticipate purchases in the face of the inflationary acceleration process.”

The document concludes by warning that “for the coming months this situation is expected to continue, in a context where the pillars of the economic model are still being outlined.”