The industrial sector includes manufacturing,mining , and construction. Overall,
this sector employed approximately24.4 percent of the workforce in 1995. Development
of this sector beganduring the World War I era, and has accelerated during the past
10 years.With Argentina's push during the 1990s to diversify its economy, growthhas
surged. Industrial development is heavily concentrated in the provinceof Buenos
Aires, as well as in centers in Santa Fé and Córdoba.Pockets of
specialized industrial development have developed in other areasto take advantage
of local natural and labour resources.
The prospect of being able to reach largermarkets on more favorable terms through the
Mercado Común del Sur(Mercosur) is spurring interest in industrial
investment and production.
This sector has shown limited growth
formany years. However, in recent years, a major overhaul in the legal frameworkhas
created incentives such that production grew 36 percent from 1990 to 1995.
Foreign investment in this sector in recent years has grownrapidly: in 1991
only ten international firms were operational inArgentina; by 1996 the number had
risen to 67 (with an additional 46 researchinginvestment opportunities).
To improve output value and increase thissector's
export share, the government has removed controls on foreign investmentand has added
favorable tax treatment as further incentive to attract newcapital.
Oil production grew from 28.1 millioncubic meters in 1990 to 45.5 million in 1996, and
natural gas productionwent from 23 million cubic meters in 1990 to 34.6 in 1996.
Through privatizationof this industry and deregulation of foreign investment,
Argentina hopesto attract nearly US$ 12 billion in new investment to this sector
between1994 and the year 2000.
Faced with competition from imports,
manysector-such as textiles, apparel, and footwear, nonmetallic mineral products,wood
products, and miscellaneous manufactures-have been seriously affected.Other sectors-such
as food and beverage, paper, chemical and petrochemicalproducts, and the automotive
industry-have shown renewed strength. Increasesin investment by local and foreign
firms are contributing to modernizationand improved efficiencies in these areas.
Construction accounted for
a little more than 5.6 percentof GDP in 1996.
In the early 1990s
pent-up housing demand, coupled withnewly available credit, led to a surge in building
activity. By 1995 thenumber of building permits issued had risen by 59 percent,
representinga cumulative addition of 59 million sq m (635 million sq ft) of space.
Some 35 percent of this construction represented new single family housing,followed
by retail space (15 percent), multifamily dwellings (14 percent),family housing with
stores (12 percent) and industrial facilities (8 percent).In 1995 permits issued for
extensions of existing structures added 3.7million sq m (41.4 million sq ft) of space,
mostly for single family homes,and retail and industrial space. In 1998 constrution is
one of the mostdynamic sectors of the economy.
Argentina's industrial policy now operates within the contextof
an open economy. The country's participation in Mercosur is having amajor effect on
market-based development as industry begins to grow tocomplement that in the economies
of member countries. Industry is generallyexpected to expand its scope and increasingly
to target foreign marketsto a much greater degree on a competitive basis. Between 1991
and 1995,exports of certain manufactured goods increased at very positive rates,especially
chemicals, plastics and trasnportation equipment.
Despite rapid growth in importance, the Argentine sevices sectorhas received relatively
little attention. In 1996 thes sector's share ofGDP was 57 percent; throughout the 1990s
the sector grew substantially(10.3 percent in 1991, 10.1 percent in 1992, 6.3 percent in
1993 and 9.4percnet in 1994). In 1995, the sevece sector shows a decease of 3.4 percent.
In 1995, according to ILO data, it employed 8 million people, or 65 percentof the work force.
The service sector includes utilities, transportationand communication, commerce
(which includes reatil and wholesale trade,lodging, restaurants, and entertainment),
financial services, and miscellaneoussevices (including professional, personal, and