National Senator Jorge Capitanich released an economic report presenting the metalworking downturn as evidence of broader productive, labor and commercial weakness. It begins with the Association of Argentine Metalworking Industrialists: output fell 6.1% year on year in August and 3.9% from July. Installed-capacity use stood at 39.6%, meaning roughly six of every ten units of productive capacity were idle.
Capitanich contrasted those figures with macroeconomic indicators used by the national government to emphasize fiscal balance and aggregate growth. His team's report says GDP declined 0.6% in the second quarter and returned to levels similar to a year earlier. The senator argues that production, consumption and investment do not amount to a recovery that households, retailers and small industries can perceive.
The weakness is not confined to metalworking. In July, Argentine industry as a whole used an average 58.2% of installed capacity, one of the lowest July readings since 2016 except for pandemic-hit 2020. The measure indicates that a large share of factories keeps lines stopped or operates below potential, although conditions differ across branches and regions.
Metalworking machinery recorded the largest year-on-year fall in capacity use, down 10.7 percentage points. The report also lists declines in non-metallic minerals, vehicles, rubber and plastics, tobacco and textiles. For small and medium-sized firms, weaker demand means shorter production runs, higher unit costs and delays in equipment purchases, maintenance or hiring.
The document also includes second-quarter labor figures. Unemployment was 7.9%, and Capitanich's team estimated around 120,000 more unemployed people than a year earlier. Informality reached 45%, with more than 500,000 workers added to unregistered employment. The report links those numbers in a cycle in which lower income reduces consumption and weaker sales reduce production and jobs.
Nearly 46,000 registered private-sector jobs were lost in the first half, and the same survey places the cumulative reduction since Javier Milei took office at 246,000. Registered employers declined for 17 consecutive months, leaving 31,342 fewer companies. Capitanich described it as the most adverse cycle since the 2001 crisis, a political assessment based on the series compiled by his team.
The senator also noted wholesale inflation of 2.1% in August, a cost pressure for companies despite weak demand. Reviewing the 2027 budget, he criticized cuts relative to 2023 in university transfers, capital spending, teacher incentives, disability, social assistance and pensions. The government, by contrast, presents fiscal discipline as a condition for economic stabilization.
The debate will continue during budget deliberations and with the next data on production, employment and capacity use. In Chaco, where many small firms depend on both regional markets and national demand, attention will focus on whether the slowdown spreads and whether credit, investment or consumption measures emerge. Capitanich's report introduces the indicators as a political argument that will be tested against subsequent official and sectoral statistics.
