Nearly half of Argentina’s industrial firms struggled to cover expenses, and more than half took on debt

The downturn in demand is hitting Argentine industrial companies more sharply, with nearly half reporting difficulties covering their regular expenses. The finding comes from the Argentine Industrial Union’s third Industrial Indicators and Expectations Survey.

Among the surveyed firms, 47.6% said they had been unable to fully meet at least one routine payment. Another 9.2% had trouble meeting all of their regular obligations at the same time, the highest figure recorded in the survey series. Taxes caused the most difficulty, cited by 34.6% of affected companies, followed closely by payments to suppliers at 33.3%.

Many companies responded by seeking financing. Some 56.2% of firms that had payment problems took on more debt or used short-term financing, while 53.2% reported facing higher financial costs. Sales fell in July at 49.7% of surveyed companies, compared with 16.2% that reported an increase. Production declined at 42.9%, while 20.9% recorded growth.

The labor market outlook was also weak. Only 16.9% expected to hire workers over the next year, while 27.5% anticipated reductions. Domestic demand ranked as the main problem for 48.6% of companies, followed by higher costs at 24.2%. Within that group, labor costs were the leading concern, cited by 42.8%, and energy costs by 17.9%.

The UIA’s Industrial Performance Monitor stood at 40.4 points in July. A reading below 50 indicates contraction, and the result was 3.1 points below the previous survey and 4.7 points below July 2025. The report said activity had stagnated since mid-2025. Among firms operating below their preferred level, 80.9% did not expect to reach it within 12 months.