National production decreased 1.29% in July of 2023

The national production reduced by 1.29%, in July of 2023, due to the unfavorable evolution of six economic activities, performance that was attenuated by the productive increase of the Mining and Hydrocarbons, Electricity, Gas and Water, Commerce, Transportation, Storage and Courier, Accommodation and Restaurants, Services Rendered to Companies and Other Services. This was informed 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 Financing. Likewise, it was stated that during the period of January-July 2023, the economy of the country decreased by 0.58%; nevertheless, during the last 12 months (August 2022-July 2023) accumulated a growth of 0.48%.

The agriculture production reduced by 0.69% as a result of agriculture (-0.72%) and livestock (-0.64%) subsectors. In the performance of agricultural subsector, contributed the lower volumes of production of green peas (-24.0%), asparagus (-22.9%), paddy rice (-22.0%), dry fava bean (-18.3%), onion (-13.8%), wheat (-8.3%) and starchy maize (-2.9%), before the reduced sowing of the main crops and abnormal weather conditions registered during the period of development of crops.

The coastal region continued to exhibit warmer than normal air temperatures caused by the Coastal El Niño phenomenon. On the Peruvian highlands, were presented winds that caused atmospheric dryness, as well as low cloud cover, consecutive warm days and nightly thermal descents. In the Peruvian forest, the moisture from the Amazon region favored some rainfall episodes; while, in the southern jungle, isolated rainfall episodes occurred, associated with the entry of the eighth cold.

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

As for the livestock subsector (-0.64%) the lower production volumes of eggs (-1.3%), poultry (-1.2%), fresh milk (-0.7%) and caprine (-0.3%) affected.

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 438,032 tons in July 2022, represented a reduction of 437,989 tons. It should be noted that the capture of anchovy, in July 2022, corresponded to the last month of the 1st fishing season in the north-center 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 progressed by 16.54% driven by the landing of species intended for canning (97.15%), freezing (22.03%) and consumption in a fresh state (10.74%). Fishing of continental origin fell 1.73%, reporting a lower extraction of species for freezing and for curing preparation.

During July of 2023, the Mining and Hydrocarbons sector grew by 11.38% given the expansion of metal mining activity (13.35%) due to the higher volume of molybdenum (24.7%), copper (18.1%) and zinc (8.6%) production, 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, the natural gas increased (26.0%).

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

The behavior of the non-primary sub-sector was influenced by the lower production of the consumer goods industry (-13.18%) and the intermediate goods industry (-12.12%), with the exception of the capital goods industry that showed an increase (32.11%). Likewise, the drop in the primary subsector was determined by the lower activity of the fish production and conservation branches (-63.8%), manufacture of primary products of precious metals (-11.2%), sugar production (-15.6%) as well as the production and conservation of meat (-0.3%).

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

Water production responded to the largest generation of the companies Sedapal (4.5%), EPS Grau (4.1%), Epsel (3.8%), Sedapar (2.5%) and Sedalib (0.9%). Likewise, gas distribution grew, for the third consecutive month, after the largest distribution to electric generators (7.3%) and to gas stations that sale vehicle natural gas (7.6%). However, less distribution was reported to the companies (-32.7%).

The Construction sector decreased by 8.80%, reflected in the reduction of domestic 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 dynamics of private works and self-construction before a slow recovery in the real estate market.

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

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

Likewise, retail sales grew by 3.58% based on the sale of fuel in gas stations and self-services, optical, agrochemical and veterinary products, and pharmaceutical products. Vehicle sales and repair of vehicles (2.61%) also increased based on competitive prices and better financing options.

The production of the Transport, Storage and Courier sector increased by 1.01% explained by the favorable result of the transport sub-sector (5.21%); however, the storage and courier sub-sector decreased (-8.69%).

The dynamism of the transport subsector was supported by the growth of air transport (13.44%), before the greater movement of passengers and cargo. The same trend, showed transport by land and pipes (3.21%) favored by the increase in the transport of passengers on the road (6.38%); on the other hand, the transport of cargo (-1.58%) contracted. Meanwhile, the transport by pipe (8.35%) was increased, explained by the increased production of natural gas. The result of rail transport (-8.16%) was affected by the lower transfer of passengers and cargo. Water transport grew 6.61% influenced by ocean and river route freight transport.

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

The Accommodations and Restaurants sector showed a growth of 1.09% reflected in the progress of the restaurant (1.07%) and accommodation (3.35%) sub-sectors. The result of the subsector restaurants was driven by the greater attendance of the public by the celebration of National Holidays, Day of the Pollo a la Brasa and National Pisco Day, favored by the use of digital media.

It also contributed to the holding of gastronomic fairs such as “Gastromaq”, “Cocoa and Chocolate Lounge 2023” and “Breads and Desserts Festival” in Lima, among the main ones.

The Telecommunications and Other Information Services sector was reduced by 2.15% given the behavior of the telecommunications sub-sector (-2.60%), which was mitigated by the slight growth of other information services (1.21%). In the telecommunications subsector, data transmission services (-19.8%) and telephony services (-5.1%) were affected while 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 display activities of movies and TV programs (13.6%) and TV and radio programming (5.9%). Instead, editing activities (-6.7%) and computer programming (-0.8%) decreased.

The Financial and Insurance sector decreased by 9.60% due to the lower granting of credits (-9.67%) and deposits (-7.01%) of full-service banking. According to sector, credits aimed at corporations, large, medium, small and micro companies (-16.2%) and mortgage loans (-1.7%) were contracted; however, consumer credits (7.3%) grew. According to economic sectors, lower credits were channeled to construction activities; manufacturing; real estate, business and rental activities; mining; agriculture, livestock, hunting and forestry; and electricity, gas and water.

The reduction of deposits from the full-service bank was recorded in the line item of Deposits for Compensation for Service Time (-21.1%), Savings Deposits (-18.9%) and Demand Deposits (-15.6%); while the Time Deposits (20.9%) increased.

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

Additionally, professional, scientific and technical activities contributed to the opening of new comprehensive engineering projects, architecture designs, construction management, consulting and supervision in works, participation in tenders and advice in companies business. On the other hand, there was a lower requirement for administrative and support services activities explained by the lower labor intermediation, staff outsourcing and outsourcing; less contracting in the rental of heavy machinery and agricultural equipment, and reduced cleaning contracts to offices and apartments. Similar behavior showed travel agency and tour operator activity.

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