PREVIEW-Argentina Sept industry output seen up 9.5 pct yr/yr

WHAT: Argentina industrial output in September (ARIO=ECI: )
WHEN: Friday, Oct 22, at 4 p.m. local time (1900 GMT)

REUTERS FORECAST: +9.5 pct yr/yr growth, according to the
median view. The seven analysts surveyed gave non-seasonally
adjusted forecasts ranging from +7.0 pct to +10.4 pct.

FACTORS TO WATCH: Argentina’s industrial output is seen
growing briskly in September, driven again by the steel, and
automobile sectors, analysts said. Auto production (ADEFA02: )
grew 37.8 percent in September from the same month last year
and could reach record levels by year-end.

Analysts say, however, some sectors are showing signs of a
slowdown.

“The chemical, agrochemical, paper and refinery sectors, as
well as manufacturers of plastic, beverage and cigarettes
produced less than (in September) last year,” said Buenos
Aires-based consultancy Orlando Ferreres and Associates.

Analysts say further investments are needed to maintain
strong industrial output growth in the medium term because some
sectors are working at maximum production capacity.

The figure will get a boost from the low base of comparison
registered in September 2009, when industrial activity shrank
0.2 percent year-on-year amid the global economic crisis.

Industrial production rose 10.1 percent in August 2010.
(ARECI10: )

MARKET IMPACT: Investors will want to see whether
industrial production growth slows slightly or if it remains a
key driver to economic growth in Latin America’s No. 3 economy.
This would mean higher payouts on Argentina’s GDP-linked
warrants.

The government forecasts the economy will expand around 9
percent this year.

Longer-term prospects for local industry are clouded by
high inflation. Analysts forecast annual inflation at over 25
percent this year. Such a result would fuel wage demands by
trade unions, eating into the country’s competitive edge over
key trade partners such as Brazil.

Business leaders have also complained about the strength of
the local peso currency (ARSB=: ), which they say hurts
Argentina’s competitiveness, and could drive foreign companies
to invest elsewhere.

LINKS: Argentina’s bureau of statistics website:
http://www.indec.gov.ar/

For historical Argentine statistical data in Spanish,
please see pages (ARECI09: ) through (ARECI14: )

To see a calendar of Argentine economic indicators click on
(ECONAR: ) or type in ECONAR on a quote page and press enter.

For separate pages detailing Argentine analysts’ economic
forecasts, click on: (ARECI05: ) (ARECI06: ) (ARECI07: ) (ARECI08: )
(Reporting by Jorge Otaola, Magdalena Morales, Hilary Burke
and Walter Bianchi; Writing by Eduardo Garcia; Editing by
Theodore d’Afflisio)

PREVIEW-Argentina Sept industry output seen up 9.5 pct yr/yr