ARGENTINA - According to data from the FAIMA Observatory, wood and furniture production in Argentina fell by 8.9% in 2018.

The furniture industry is the segment most affected, showing a drop of 11.5% in its level of production, while wood production fell 1.3%. FAIMA went further and revealed that according to an industry survey 80% of companies do not believe that the situation will improve in 2019.

Given this reality, the government decreed the wood-furniture industry as a "sensitive sector" and will pay less social charges. The announcement was made on Thursday February 14 at Casa Rosada, as reported from the Chamber of Woodworking and Related Companies, CEMA. Companies may deduct the total non-taxable minimum of employer contributions in the calculation of the social contributions of their workers. The measure was well received by the representatives of the business chambers that attended the announcement. However, they said that other measures are needed to relieve the productive sector. In particular, they demanded a reduction in export taxes.

The fall in consumption is the main factor that explains this dynamic. The rate of deterioration in the last months of the year is unprecedented. The furniture industry contracted 37.5% year-on-year in December, while the wood industry and its manufactures 16.7%.

According to estimates by FAIMA Observatory, the production level that the sector achieved in 2018 is 12% lower than in 2015. Data obtained from the FAIMA Observatory (Argentina Federation of the Timber and Allied Industries) based on the IPI-INDEC and own surveys.