November 21, 2012 / 7:56 PM / in 5 years

UPDATE 2-Argentina says industry output rebounds in October

* Activity rose 4.7 pct in October vs September

* Data far exceeds market expectations for a decline

* Industry output still down 0.9 percent in Jan-Oct period

By Juliana Castilla

BUENOS AIRES, Nov 21 (Reuters) - Argentina’s industrial output rebounded in October, rising 2.2 percent from a year ago in its first gain n seven months as the car industry picked up, government data showed on Wednesday.

The government said factory production rose 4.7 percent in October from September, seasonally adjusted, suggesting activity is coming off mid-year lows in Latin America’s third-largest economy.

Argentina’s economy has slowed this year after booming for most of the last nine years, hurt by high inflation and sluggish growth in Brazil, its key trade partner.

October’s better-than-expected result reflected a revival in the automobile industry, a primary industrial player in the South American country.

“We’ve seen the first signs (of recovery),” said Abel Viglione, an analyst the Buenos Aires-based consulting firm FIEL, adding that it was still too early to say if the economy had turned a corner.

Brazilian demand for Argentine automobiles is a key factor for industrial production since Argentina sends about 80 percent of its automotive exports to its giant neighbor.

Both production and exports recovered sharply last month, partly explaining the industrial rebound.

Argentine automobile production rose 8.4 percent in October from a year earlier, compared with a 14.1 percent decline in September.

Exports improved significantly, rising 20.7 percent year-on-year versus a drop of 9.8 percent in September, data from private carmaker group ADEFA showed.

The textile and refining sectors also performed well in October, according to the national statistics agency INDEC.

Wednesday’s data far outpaced expectations. Six analysts surveyed by Reuters forecast a 1.2 percent decline in factory output last month year-on-year, according to the median of estimates ranging from -3.0 percent to +1.0 percent.

In the first 10 months of the year, factory output in Argentina fell 0.9 percent from the same period a year earlier, according to the non-seasonally adjusted data.

In October 2011, industrial output rose 4.1 percent year-on-year. In September this year, it fell 4.4 percent.

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