Retail and steel lost their stride
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10th September 2014

In a sort of tone deafness to domestic conditions, these industries seem to be decreasing their revenues more than the region’s demand conditions would indicate. Results of the Latin Trade’s 2Q14 Multilatina Index.
By Santiago Gutierrez
For those who follow data from Latin American non-financial companies, the common wisdom has been that domestic markets have been the real support for corporate growth in the region in the past few months. The general trend in the latest Multilatina Index, published by Latin Trade, is consistent with the idea that, on average, larger sales in the domestic market coincide with larger revenue increases. Air transportation, which makes 88% of its sales in the international market, reported a 1.7% decrease in 2Q14 revenues compared to 2Q13; media companies, which only sell 14% abroad, increased their revenue by 8.4% over the same period.
However there are some important outliers. Industries like steel and retail, which normally prosper or fail in tandem with domestic consumer cycles, missed the beat.Steelposted a 2Q14 decreasein revenues of2.7% and retail a slim 0.2% increase YoY.
At the same time, other industries which are typically reliant on domestic consumption like food and beverages, reported extraordinary results. Food companies included in the Index increased their sales by a striking 19.3% YoY on 2Q14, while beverage companies did so by 5.5%.
Telecoms, which behave differently – more in accord to the mix of local and …

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