National production decreased 1.29% in July 2023

By INEI

This is a machine translation of the original press release issued in Spanish 

September 15, 2023

National production was reduced by 1.29%, in July 2023, due to the unfavorable evolution of six economic activities, a performance that was attenuated by the productive increase in the Mining and Hydrocarbons sectors; Electricity, Gas and Water; Trade; Transportation, Storage and Courier; Accommodation and Restaurants, Services Provided to Companies and Other Services. This was announced by the National Institute of Statistics and Informatics (INEI), in the technical report National Production.

Among the sectors that showed negative behavior were Agriculture, Fishing, Manufacturing, Construction, Telecommunications and Finance. Likewise, it was specified that in the period January-July 2023, the country's economy decreased by 0.58%; However, in the last 12 months (August 2022-July 2023) it accumulated a growth of 0.48%.

Production in the Agricultural sector decreased by 0.69%

Agricultural production decreased by 0.69% as a result of the agricultural (-0.72%) and livestock (-0.64%) subsectors. The performance of the agricultural subsector was influenced by the lower production volumes of green grain peas (-24.0%), asparagus (-22.9%), paddy rice (-22.0%), dry grain beans (-18.0%), .3%), onion (-13.8%), wheat (-8.3%) and starchy corn (-2.9%), given the reduced planting of the main crops and anomalous weather conditions recorded during the period of crop development.

The coastal region continued to present warmer than normal air temperatures caused by the El Niño Costero phenomenon. In the mountains, winds occurred that generated atmospheric dryness, as well as low cloudiness, consecutive warm days and nighttime thermal drops. In the jungle, humidity from the Amazon favored some rainy episodes; while, in the southern jungle, isolated episodes of rain occurred, associated with the entry of the eighth cold.

Regarding the livestock subsector (-0.64%), the lower production volumes of eggs (-1.3%), poultry (-1.2%), fresh milk (-0.7%) and goats (- 0.3%).

Fishing Sector fell by 47.94%

The Fishing sector contracted by 47.94%, explained by the lower landing of maritime origin (-54.73%), of species for indirect human consumption (anchovy for fishmeal and fish oil), extracting 43 tons which, compared to the 438,032 tons in July 2022, meant a reduction of 437,989 tons. It should be noted that the anchovy catch, in July 2022, corresponded to the last month of the 1st fishing season in the north-central area of the Peruvian sea; while, in the month of analysis, the suspension of the capture of the resource continued.

On the other hand, fishing for direct human consumption advanced 16.54%, driven by the landing of species intended for canning (97.15%), frozen (22.03%) and for consumption in a fresh state (10. 74%). Continental fishing fell by 1.73%, reporting a lower extraction of species for freezing and for curing preparation.

The Mining and Hydrocarbons sector increased by 11.38%

During July 2023, the Mining and Hydrocarbons sector grew by 11.38% due to the expansion of metallic mining activity (13.35%) due to the greater volume of production of molybdenum (24.7%), copper (18.1%) and zinc (8.6%), among the main ones. However, the production of the hydrocarbon subsector decreased by 1.64%, reflected in the lower level of exploitation of natural gas liquids (-13.8%) and crude oil (-7.2%); while natural gas increased (26.0%).

Manufacturing Sector decreased by 13.89%

The production of the Manufacturing sector was reduced by 13.89% explained by the lower activity of the non-primary (-12.43%) and primary (-18.24%) manufacturing subsectors.

The behavior of the non-primary subsector was influenced by the lower production of the consumer goods industry (-13.18%) and intermediate goods industry (-12.12%), with the exception of the capital goods industry which showed an increase (32.11%). Likewise, the fall in the primary subsector was determined by the lower activity of the fish processing and preservation branches (-63.8%), manufacturing of primary precious metal products (-11.2%), sugar manufacturing (-15.6%); as well as the preparation and preservation of meat (-0.3%).

Production in the Electricity, Gas and Water sector grew by 2.33%

The Electricity, Gas and Water sector increased by 2.33% driven by greater generation of electrical energy (2.29%), water production (2.83%) and gas distribution (1.00%). The result of the electricity subsector was the result of the greater generation of energy of thermoelectric origin (15.3%) and non-conventional renewable energy (11.1%). Meanwhile, hydroelectric energy generation decreased (-15.1%).

Water production responded to the greater generation of the companies Sedapal (4.5%), EPS Grau (4.1%), Epsel (3.8%), Sedapar (2.5%) and Sedalib (0.9%). In turn, gas distribution grew for the third consecutive month, after greater distribution to electric generators (7.3%) and to vehicle natural gas sales establishments (7.6%). However, lower distribution to companies was reported (-32.7%).

Construction Sector decreased by 8.80%

The Construction sector fell by 8.80%, reflected in the reduction of internal cement consumption (-6.10%) and the physical progress of public works (-16.64%). The unfavorable performance of domestic cement consumption was due to the lower dynamism of private works and self-construction in the face of a slow recovery in the real estate market.

On the other hand, the limited physical progress of public works was recorded at the Local Government level (-31.8%) and Regional Government (-18.7%); partially offset by the National Government (11.5%). Thus, the improvement, rehabilitation and expansion of sanitation and electrification services were affected; progress of works on highways, rural roads and other types of road work; as well as improvement work in health centers, educational centers, among others.

The Commerce sector grew by 3.01%

In July 2023, the Commerce sector increased by 3.01%, showing favorable results in its three components; wholesale sales (2.83%) due to the marketing of fuels and lubricants; on-demand machinery and equipment for industrial engines, metal-mechanical loaders and medical equipment through purchase orders; computers and peripheral equipment by selling the latest versions of hardware and software; natural products, agro-drugs and safety.

Likewise, retail sales grew by 3.58%, supported by the sale of fuel at taps and self-service stores; optical, agrochemical and veterinary products, and pharmaceutical products. Vehicle sales and repairs also increased (2.61%) based on competitive prices and better financing options.

Transportation, Storage and Courier Sector increased 1.01%

The production of the Transportation, Storage and Couriers sector increased by 1.01% explained by the favorable result of the transportation subsector (5.21%); However, the storage and messaging subsector fell (-8.69%).

The dynamism of the transportation subsector was supported by the growth of air transportation (13.44%), given the greater movement of passengers and cargo. A similar trend was shown by transportation by land and pipelines (3.21%) favored by the increase in passenger transportation by road (6.38%); On the contrary, cargo transportation contracted (-1.58%); while pipeline transportation increased (8.35%) explained by the greater production of natural gas. The result of rail transport (-8.16%) was influenced by the lower transfer of passengers and cargo. Water transport grew 6.61% influenced by cargo transport by sea and river.

The decrease in the storage and courier subsector was explained by lower storage and transportation support activities (-9.07%) and postal and courier services (-1.36%).

Production in the Accommodation and Restaurants sector increased by 1.09%

The Accommodation and Restaurants sector showed a growth of 1.09% reflected in the advance of the restaurants (1.07%) and accommodation (3.35%) subsectors. The result of the restaurants subsector was driven by the greater attendance of the public due to the celebration of National Holidays, Grilled Chicken Day and National Pisco Day, favored by the use of digital media.

Likewise, the holding of gastronomic fairs such as: “Gastromaq”, “Salón del Cacao y Chocolate 2023” and “Festival of breads and desserts” in Lima, among the main ones, contributed.

Telecommunications and Other Information Services Sector decreased by 2.15%

The Telecommunications and Other Information services sector decreased by 2.15% due to the performance of the telecommunications subsector (-2.60%), which was attenuated by the slight growth of other information services (1.21%). In the telecommunications subsector, data transmission services (-19.8%) and telephone services (-5.1%) were affected; Meanwhile, Internet and subscription television services grew by 4.8%.

The growth of the other information service subsector was determined by the progress in the production and exhibition activities of films and TV programs (13.6%) and TV and radio programming (5.9%). On the other hand, editing activities (-6.7%) and computer programming (-0.8%) fell.

The production of the Financial and Insurance sector was reduced by 9.60%

The Financial and Insurance sector decreased by 9.60% due to the lower granting of loans (-9.67%) and deposits (-7.01%) from commercial banks. By segment, loans directed to corporations, large, medium, small and microenterprises (-16.2%) and mortgage loans (-1.7%) contracted; However, consumer loans grew (7.3%). According to economic sectors, fewer credits were channeled to construction activities; manufacture; real estate, business and rental activities; mining; agriculture, livestock, hunting and forestry; and electricity, gas and water.

The reduction in commercial banking deposits was recorded in the heading of Deposits for Compensation for Time of Service (-21.1%), Savings Deposits (-18.9%) and Demand Deposits (-15.6%). %); while Term Deposits increased (20.9%).

Services Provided to Companies Sector grew by 1.18%

In July 2023, the Business Services sector increased by 1.18% driven by advertising and market research (9.6%) and professional, scientific and technical activities (2.7%); However, administrative and business support services activities (-1.9%) and travel agencies and tour operators (-15.0%) decreased. Advertising and market research grew due to advertising designs in corporate image, digital advertising on networks, strategies at the point of sale, launch of campaigns for Cyber Days and celebration of National Holidays, among the main ones.

Additionally, professional, scientific and technical activities contributed by opening new comprehensive engineering projects, architectural designs, construction management, consulting and supervision in works, participation in tenders and advice on business deals. On the other hand, lower requirements for administrative and support services activities were reported, explained by lower labor intermediation, personnel outsourcing and outsourcing; less contracting in the rental of heavy machinery and agricultural equipment, and reduced cleaning contracts for offices and apartments. Similar behavior was shown by the activity of travel agencies and tour operators.

Government services increased by 2.77%

Government services grew 2.77% due to the greater activities carried out by Public Administration institutions (2.8%), Defense (2.6%) and Other government services (2.7%).