Queretaro, Qro. The increase in production costs, due to the higher cost of inputs, as well as the risk of an upcoming global logistics crisis, slow down the recovery process of the industry installed in Querétaro.
The president of the National Chamber of the Transformation Industry (Canacintra), Querétaro delegation, Esaú Magallanes Alonso, explained that it could be until the end of 2022 and even the beginning of 2023 when the local industry resumes the pre-pandemic production level.
However, this projection is subject to the behavior of the challenges they face today.
Currently, the local industry is at a production level 23% higher than in 2021; however, it remains 25% below pre-pandemic levels.
“We believed that there was a very quick recovery, but now with all the issues of the war, with the inflation that is hitting us all quite a bit, I think we are going to recover until the beginning of the next year or the end of this one,” he explained.
Inflation and the rise in production costs is another phenomenon that puts pressure on the performance of the industry.
The Canacintra leader explained that they carried out an analysis of the increase in the prices of inputs, detecting that between March 2020 and March 2022 some materials increased their prices by up to 300%, including steel, cardboard and resin.
Meanwhile, gasoline increased its price by 9% in one year, which in turn generated an escalation in the prices of various products.
“Gasoline goes up and everything goes up, energy goes up and everything goes up (…) All of that affects us a lot,” he emphasized.
The industrialists have chosen to absorb a proportion of the increase in the prices of raw materials, with the aim of cushioning the impact on the final consumer. “What we have done as businessmen is to try to absorb this so that it does not reach the final consumer (…) We have changed our production processes, we have done many things, but it is affecting us now, more so with inflation.”
Impact
The food industry is one of the most impacted by inflation; therefore, from the national representation of the chamber it is proposed to the Federation to establish some support or subsidy scheme for the Private Initiative, particularly for the agricultural sector.
Added to this environment is the impact generated by the stoppage of operations in the port of Shanghai, China, the effects of which could be observed in Mexico within a couple of months.
“It is another blow that they closed the port of Shanghai, I was seeing that many containers of supplies are stopped, so we have to wait to see how that affects, it is not at the moment, but maybe in two or three months there may be a repercussion in the market, even here”, explained the local president of Canacintra.
However, during 2021, the annual growth of 6.9% in the state economy had greater support in secondary activities that contributed 4.2 percentage points, followed by tertiary activities that contributed 2.8 points and the contribution of primary activities was negative. , of -0.1 percentage points, expose the results of the Quarterly Indicator of State Economic Activity (ITAEE), of the National Institute of Statistics and Geography (Inegi).