Industry & Retail
From The Report: Peru 2016
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With falling commodity prices taking their toll on Peru’s export revenues and GDP growth, the focus of the Ministry of Production (PRODUCE) has turned to the diversification of the economy and provision of greater added value to production. PRODUCE has set the target of returning Peru to 7% growth rates through private partnerships that will develop the country´s secondary and tertiary industries. Despite these efforts, the industrial sector is experiencing a slowdown, with sector GDP amounting to $9.8bn in the first five months of 2015, a 2.6% year-on-year decrease. Meanwhile, Peruvian retailers look set to take stock and focus on maximising revenues rather than rushing to open more floor space. The days of double-digit consumer growth may be a thing of the past, but medium-term expansion of between 3% and 4% in 2016 presents attractive prospects. While per-capita incomes remain low by regional standards, recovering commodities prices are expected to support the retail sector’s long-term potential.

Articles from this Chapter

Overview

Variety show: Government initiatives seek to diversify the local economy
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Traditional exports, principally metals, have helped make Peru one of the fastest growing Latin American economies over the last decade. However, falling commodities prices have taken their toll on export revenues and GDP growth. The focus of the Ministry of Production (PRODUCE) in recent years has, therefore, been on diversifying the Peruvian economy and providing greater added value to production. Under the leadership of Minister Piero Ghezzi, PRODUCE has set the target of returning Peru to 7%…

Analysis

Protective measures: Steel firms look for ways to profit amidst heightened competition
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In recent years Peru’s steel production has remained steady, at some 1.1m tonnes annually. With the development of major mining and infrastructure projects, the country imports about half of its total steel consumption. Around 70% of the demand is for long steel products, of which 60% has traditionally been supplied by local producers. For flat steel products, however, imports account for around 80% of supply. Shifting Climate This figure is likely to increase further as economic shifts abroad…

Analysis

Dressed for success: Fast fashion retailers are gaining popularity among consumers
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The fast fashion business model has revolutionised the apparel industry. By streamlining design, production and distribution, the latest clothing trends can be transferred from the catwalk to the sales rack in a matter of weeks. One of the keys to the success of the model is the near-shoring of suppliers. Inditex, owner of numerous brands including Zara, Pull & Bear, and Massimo Dutti, maintains a network of designers and key suppliers in La Coruña, Spain and has manufacturing facilities in…