Industry or manufacturing in Argentina is the creation or production of goods with the help of equipment, labor, machines, tools, and chemical or biological processing or formulation in Argentina. It is Argentina's secondary sector of the economy. Argentina's first wave of industrialization occurred during its Belle Époque when the country experienced a surge of immigration and became incorporated into the global economy. Scholars estimate that Argentine industry grew by an annual rate of 5–8% between the 1870s—when factories were "virtually non-existent" in the country—and 1913.
With industrial production of US$79.8 billion in 2023 (19% of GDP), Argentina is the third-largest industrial power in Latin America after Mexico and Brazil. Argentina’s industrial base includes small and medium-sized enterprises as well as large domestic and multinational manufacturing facilities. Argentina is rich in natural resources, with a relatively skilled workforce, Argentina exported almost US$45 billion in manufactured goods in 2023.
Argentine industry is dominated by food processing, chemicals, motor vehicles, metals, and machinery and equipment, which together account for 85% of gross value added in manufacturing. These sectors are either the result of Argentina's comparative advantage in agriculture and energy or reflect government policy to promote strategic industries.
Although Argentine manufacturers have been negatively impacted by shortages of foreign currency and imported parts, as well as decreased demand due to the economic downturn that started in mid-2023, global and domestic companies have continued to invest in Argentine industry given the country's long-term potential.
History Proto-industrial activity dates back to the first human settlement, approximately 14,000 years ago. During the pre-Columbian era, the indigenous peoples who inhabited the territory that is now Argentina, which included the Diaguita, Guaraní, Mapuche, and other groups, produced goods such as textiles, weapons, handicrafts, and canoes. Their early technological sophistication was demonstrated by the use of loom weaving and the development of an elaborate ceramics industry.
During the Spanish colonial period, the interior region of Argentina was the centre of economic activity due to its pre-Columbian population density and geographical proximity to the silver mines at Potosí in what is now Bolivia. A small export industry emerged around Tucumán, which by 1600 had become a center of cloth production using cotton supplied by indigenous forced labor under the encomienda system. Minor industries producing tradable goods had emerged by 1750 in Córdoba (glassworks), Santiago del Estero (cochineal dyes), Corrientes (coarse frieze and sack cloths), and Misiones (barrels and river barges). For the most part, however, proto-industry in the interior existed primarily on a subsistence basis to meet local or household needs due to low productivity, transportation barriers, and limited demand. Even the export trade with Potosí delined after 1800 due to a decline in silver output.
Production of cattle hides from the region around Buenos Aires became a large-scale export industry during the 18th century, driven by increased demand for leather in Europe. French merchants arrived after the Philip V of Spain awarded a slave asiento concession to the French Guinea Company in 1702; between 1708 and 1712, French merchants purchased an estimated 175,000 hides. British merchants took over the hide trade after 1714, when the Treaty of Utrecht transferred the asiento to the British South Sea Company. With local administrators encouraging export diversification, production of beef jerky by saladeros for slave plantations in Brazil and Cuba became an important activity after 1780. Given this commercial expansion, a limited artisanal industry emerged in Buenos Aires focused on craft products such as leather shoes and silverwork where raw materials were abundant and inexpensive. Local production of other goods would be constrained by labor scarcity, lack of raw materials, and competition from British imports.
The industrial structure established pre-independence remained largely intact during the first half-century post-independence. In the interior, local protectionism and high transportation costs enabled handicraft industry, particularly textiles, to survive. As late as 1869, Argentina's census identified almost 100,000 textile producers in the interior provinces (95% of the national total) where they comprised 20% of the labor force. In Buenos Aires and the neighboring Littoral, production of cattle hides, tallow, and beef jerky flourished in the mid-19th century. Beef jerky exports increased by 7% annually from independence to the mid-1870s while hide exports were supported by supply interruptions in competitors such as Russia. Few other industrial activities developed during this period. Although Argentina enjoyed a boom in wool exports during the mid-19th century, these exports consisted of raw wool rather than processed goods such as yarns or woolens. Meanwhile, due to free trade policies, demand for consumer goods in Buenos Aires and the Littoral was met primarily by European imports rather than by local artisans or the inefficient craft industries of the interior.
Emerging industry 1870–1930 Argentina's first wave of industrialization occurred during its Belle Époque when the country experienced a surge of immigration and became incorporated into the global economy. Scholars estimate that Argentine industry grew by an annual rate of 5–8% between the 1870s – when factories were "virtually non-existent" in the country – and 1913. As a result of this rapid expansion, large industrial interests controlled by multiple families. Families including the Tornquists (sugar, meatpacking, metals), Devotos (paper, textiles), Bembergs (beer, sugar), Grimoldis (shoes), and Noels (candy, canned goods) among others, emerged during this period.
Local manufacturing received a significant boost under Argentine president Nicolás Avellaneda, who in 1876 responded to an economic downturn by abandoning the gold standard and increasing duties on imported goods, leading to a period of import substitution. Meanwhile, an influx of European immigrants after 1875 brought both increased consumer demand as well as the human capital required to sustain domestic manufacturing. However, as many firms had a restricted access to capital, industrial establishments during this era consisted predominantly of artisan workshops focused on low-cost or made-to-order production for the domestic market. As late as 1913, the local textile industry supplied less than 20% of Argentina's domestic consumption.
Large-scale export industries emerged during the early 1900s. Argentina's frigoríficos were built by American interests, which by 1914 controlled between one half and two thirds of beef exports. The 1920s saw Argentina move into a secondary phase of industrialization with the emergence of new sectors such as automobile assembly, rubber products, chemicals, and machinery. By the late 1920s, there were already over 50,000 industrial establishments producing approximately 20% of GDP.
Import substitution 1930–1975 Light industry expanded, beginning in the 1930s and accelerating under Juan Perón, including Argentina's brief emergence as an exporter of manufactured goods during World War II. Heavy industry expanded in the 1960s and by 1970, Argentina had a modern industrial base that produced steel, petrochemicals, and motor vehicles. However, Argentine industry relied heavily on protection from imports. An emphasis on non-traditional exports was successful but costly.
Industrialization deepened with the onset of the Great Depression and accelerated during World War II due to shortages of imported goods. The most dynamic industries were consumer goods, household electric appliances, and simple machinery and metal products. The Argentine government promoted industries through import restrictions and low-cost credit (often with negative real interest rates) through the Banco Industrial. However, constraints on growth emerged by the 1950s, as recurring balance of payments crises created shortages of imported equipment and inputs, while entrepreneurs faced technological obsolescence and struggled to expand into more complex and higher-value products.
Argentine manufacturers expanded production during wartime shortages. Exports of manufactured goods increased from US$10 million in 1938 (2% of total exports) to US$131 million in 1946 (11% of total exports). However, this expansion was reversed due to the reconstruction of Western European industry and the shift back to civilian production in the United States. By 1949, manufactured exports had fallen to only US$21 million, comprising 2% of total exports—the same level as before the war.
Under President Frondizi's developmentalism model, foreign capital and technology were welcomed to build capital-intensive heavy industry. The dynamic sectors during this period were motor vehicles, steel, and petrochemicals. By the early 1970s, Argentina possessed a diversified industrial base. However, these industries were inefficient due to a lack of scale, extensive vertical integration, and excessive product differentiation. Argentine manufacturing was also characterized by underdeveloped capital goods industries and limited production of intermediate goods such as steel, aluminum, and paper.
With a saturated domestic market and the need to generate foreign currency, successive Argentine governments starting in the mid-1960s promoted industrial exports through financial incentives and managed trade agreements. Exports of manufactured goods increased from US$250 million in 1970 (14% of total exports) to US$1.9 billion in 1980 (23% of total exports).
Deindustrialization 1975–2002 The military regime that ruled Argentina from 1976 to 1983 attempted to liberalize the economy. Under Economy Minister José Alfredo Martínez de Hoz, public policy emphasized the sinceramiento of the economy (roughly translated as 'making the economy sincere''') based on comparative advantage. During the first two years of the military administration, industrial production continued to grow despite a reduction of tariffs from an average of 90% in 1976 to 50% in 1978; historians credit the improved scale and competitiveness during the export promotion era of the early 1970s. However, after 1978, rising interest rates and overvaluation of the peso as part of Martínez de Hoz's anti-inflation strategy resulted in an influx of imported goods that overwhelmed local industry. This economic liberalization extended through the Menem era.
Stabilization programs during the 1980s, designed to address hyperinflation and the foreign debt crisis, led to further deterioration of local industry. Between 1980 and 1990, industrial output decreased by 24%, and industrial employment fell by 30%. Industry experienced a "regressive restructuring" that undermined the technology, experience, and human capital accumulated during the four decades of import substitution. Yet even under these challenging conditions, key industrial subsectors continued to expand, particularly in intermediate goods and the processing of exported primary goods.