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El Salvador INDUSTRY
The creation of the CACM fostered development of industry in
El Salvador during the 1960s by reducing intraregional trade
barriers, which increased aggregate demand for manufactured
goods. The Salvadoran and Guatemalan manufacturing sectors
benefited from and conversely suffered the most when the CACM
lost momentum after the 1969 Salvadoran-Honduran war. During the
1980s, however, industrial output, affected by guerrilla attacks
on power plants and by reduced investor confidence, also suffered
declines by an average of 0.7 percent each year between 1980 and
1986.
Manufacturing of consumer goods predominated in the
industrial sector. About 50 percent of manufactured goods
produced were either food products or beverages. Intermediate
goods, such as chemicals and pharmaceuticals, increased in
importance during the 1970s but still constituted only about 15
percent of manufacturing output in 1986. El Salvador also had
small industries that produced tobacco products, petroleum
products, clothing, textiles, wood products, and paper products.
Construction was the second leading contributor to the industrial
sector, but its contribution to GDP was considerably less than
that of manufacturing.
Data as of November 1988
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