Although the private manufacturing industry in Venezuela experienced overall growth in 2023 (2.3%) and 2024 (1.9%), according to data from Conindustria, this growth has been marked by significant heterogeneity, raising concerns about its sustainability in the medium and long term.
This conclusion is part of the “Venezuela Economic Report. April 2025,” prepared by the Institute of Economic and Social Research (IIES) at the Andrés Bello Catholic University (UCAB), which analyzes various factors related to the Venezuelan real economy, particularly focusing on the manufacturing industry.
The report indicates trends in the manufacturing industry for the period 2023-2024, noting that the automotive and auto parts sector stands out as the only one with sustained and significant growth. Meanwhile, sectors such as beverages, food, and wood and paper also showed growth, albeit more moderate.
Mixed Behaviors
The report states that other sectors exhibited mixed behaviors, with contractions in 2023 and growth in 2024, such as pharmaceuticals, plastics and rubber, metals, and other industries, or vice versa in the case of textiles and footwear, chemicals, and non-metallic products. In contrast, the machinery and equipment sector contracted in both years.
Regarding large companies, they demonstrated a greater capacity for sustained growth. Small businesses grew in 2023 but contracted in 2024, while medium-sized companies contracted in 2023 and grew in 2024.
Despite the overall growth, eight industrial sectors, representing 80.5% of production, showed a downward trend in 2024. The automotive sector, performing the best, only accounts for 0.5% of the index.
The report indicates a trend towards improved utilization of installed capacity, averaging 47%, suggesting that growth is based on the use of idle capacity rather than an expansion of total production capacity. The highest levels of usage are concentrated in food, pharmaceuticals, and machinery and equipment.
Manufacturing Industry Outlook for 2025
The report refers to the Industrial Situation Survey from the second half of 2024, which reveals a deterioration in the sector’s expectations for 2025.
While most respondents reported an increase in production volume and order books in 2024 compared to 2023, there is a slowdown in the growth of order volumes and the number of secured workdays.
Regarding the main obstacles to growth identified by producers, high tax pressure, fuel supply issues, competition from imports, political uncertainty, the macroeconomic environment—especially inflation—and lack of funding are mentioned.
Sales expectations for the next quarter have significantly declined in the last quarter of 2024 compared to the previous quarter and the same period in 2023. Pessimism about the country’s economic situation for the next 12 months has intensified towards the end of 2024.
Growth Slowdown in 2025
The report concludes by reaffirming the fragility and heterogeneity that characterizes the recent growth experienced by the private manufacturing industry in Venezuela.
In this regard, the outlook for 2025 points to a slowdown in this growth, influenced by deteriorating expectations, a reduction in secured workdays, and the persistence of adverse macroeconomic factors such as inflation and exchange rate differentials.
If no changes occur in the underlying macroeconomic and financial conditions, it appears highly complex for significant growth in the sector in 2025.