Industry leads formal job losses in Argentina under Milei; Techint warns of 'extreme fragility'

Argentina's manufacturing industry is experiencing the most significant formal private job losses since President Javier Milei assumed office, accounting for more than one in three formal private sector jobs eliminated. The sector has shed nearly 90,000 jobs since its peak in August 2023, representing a 7.5% decrease. The textile, apparel, leather, and footwear branches have been particularly hard-hit, with a 23% contraction.

This stark reality coincides with a critical assessment from Techint, a major industrial group. In its latest informative bulletin, economists Bernardo Kosacoff and Diego Coatz described the industry as being in a state of "extreme fragility." Their analysis reveals a fragmented industrial landscape comprising a modern, export-oriented core; a large segment focused on the domestic market with productivity issues; and a low-productivity, high-informality segment.

The deterioration, however, predates the current administration. Between 2011 and 2025, industrial GDP per capita has shrunk by 28%, with no net formal job creation in the sector despite population growth. While some areas like agricultural milling and hydrocarbon production have shown recovery, many branches serving the domestic market lag behind.

Compounding these domestic challenges is the transformation of global trade, with China now dominating half of the world's industrial production and over 20% of manufactured goods trade. This competitive landscape is further complicated by global capacity surpluses and state-subsidized policies. Kosacoff and Coatz argue that Argentina must rethink its global insertion, leveraging opportunities in oil and gas, mining, and agribusiness. However, they caution that ensuring these export drivers create backward linkages with local suppliers, engineering, technology, capital goods, and skilled employment will not happen automatically.

The Unión Industrial Argentina (UIA) is set to host its Industry Day celebration on September 2, amidst this challenging backdrop. The event, to be held at Laboratorios Elea in Buenos Aires province, will see invitations extended to President Milei, his ministers, Governor Axel Kicillof, and leaders from major factories across the country.