Private industrial production grew 16.9% during the first quarter of 2024

According to the data provided by the Conindustria Statistical Information System (SIEC)obtained through the Industrial Situation Survey In the first quarter of 2024 (ECI-I24), private industrial production grew 16.9% compared to the same period in 2023.

While it is true that positive figures are recorded when compared to the same period in 2023, manufacturing has not yet reached the optimal balance point in terms of production levels and Some industries are experiencing low profitabilityConindustria said in a press release.

The figures also indicate that annualised production growth in January was 26.3%, in February 21.2%, and in March 4.4%.

Luigi Pisella, president of Condustryreported that 65% of the manufacturing companies private sector estimated that the country’s economic situation will improve over the next 12 months.

He also noted that the confidence index rose from 34.4% in the fourth quarter of 2023 to 42.1% in the first quarter of 2024, the highest in recent quarters.

According to the data analysis, the main factors that impact the production of the private manufacturing They are, first of all, the Excessive fiscal and parafiscal taxes (90%), followed by the competition from imported products (87%), as well as the lack of financing (74%). Also, it highlights the low domestic demand (63%), in fourth place; and the illicit trade (48%), fifth. In sixth place returns the fuel shortageespecially in the interior of the country (44%) as another variable to consider that affects the productivity of the national industry.

Similarly, manufacturing maintains an average capacity utilization of 37.6%. However, 34% of small businesses use less than 20% of their installed capacity.

The SIEC also provided information on the behavior by company size in the period analyzed, compared to the year 2023, highlighting that large and medium-sized companies showed growth of 18.8% and 12.0% respectively. Meanwhile, in small companies it was 14.3%.

Producing in Venezuela is increasingly expensive

The president of Conindustria indicated that since 2021 the cost of producing in Venezuela has become steadily more expensive.

“The exchange rate appreciation from 2021 to 2024 is equivalent to 105%. That is, national products cost 105% more than imported products”.

According to Pisella, this distortion is not only affecting national private manufacturing, but it also negatively influences foreign capital investments and affects the export capacity of products made in the country.

“So far this year, inflation is 6.3% and the exchange rate has shifted by just 1.4%. This means that we have a difference of around 5%, which makes national production more expensive and affects exports.”he stressed.

He argued that economic policies are needed to control inflation, but not to be anchored to the exchange rate, since it directly affects national production and therefore GDP growth, employment and exports of non-traditional products.

Best performing sectors

The industrial sectors that showed good performance during this quarter were: food (35.1%), wood and paper (75.9%), pharmaceutical (38.5%), auto parts (41.0%), and chemical (11.9%)).

Among those that fell were metal and metal products (40.8%), non-metal (17.8%), plastic and rubber (10.6%), and other industries (13.6%).

Production expectations

For their part, large manufacturing companies estimate that Its production growth might reach 9.2%In the case of medium-sized industry, they consider that they can reach 5.7%. However, small-scale industries consider that their production might fall by 0.4%. The average growth for Venezuelan industrialists, in 2024, is currently around 8.8%.