MexECON Blog

October Industrial Output Falls 0.3 Percent

Mexico's October industrial production fell a seasonally-adjusted 0.3%, after a revised flat reading in September.  Revised figures showed output rising 0.4% in August and 0.5% in July.  According the report, from the official statistics agency INEGI, production during October was down in every major category, including mining, utilities, construction, and manufacturing.  However, factory output was down by only 0.2%, reflecting improvement from the revised decline of 0.4% in the previous month.  Overall industrial output in Mexico has now risen in 11 of the last 14 months.  In unadjusted terms, output in October was up 3.7% from the same month one year earlier.

Comment:  The industrial activity report for October is consistent with a Mexican economic environment in which exports and industrial production are still rising, but at a more modest pace than earlier in the country's current economic rebound.  Looking forward, recent improvements in Mexican consumption and investment suggest the industrial sector should continue to rise moderately.  For example, it was especially encouraging that a report last week showed fixed investment in Mexico rose at a healthy pace for a third straight month in September.  Nevertheless, overall economic growth is still likely to moderate in 2011, as waning demand from the United States puts an end to the rapid export growth that Mexico enjoyed in 2010.

Patrick Fearon, CFA
Vice President, Fund Management

                               Mexican Industrial Production
                             Seasonally Adjusted, 2003 = 100
                                             Source:  INEGI
Industrial Output 1010

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