MexECON Blog

January Industrial Output Rises 3.6 Percent YOY

January industrial production was up 3.6% from the same month one year earlier, accelerating from a rise of 1.6% in the year to December.  Prior to that, output had fallen on a year-over-year basis for 17 straight months.  Today's report (from the national statistics agency INEGI) showed that the rise in production in January stemmed primarily from an 8.0% increase in manufacturing output.  The rise in factory production included big increases in transportation equipment, machinery, clothing, computer and communications equipment, and electronic components and accessories.  Meanwhile, utility output was up 2.6% year-over-year.  The report showed that mining output was up 1.3%, as non-petroleum output rose 14.0%, helping offset a 1.6% decline in petroleum production.  Construction output was down 5.0%.

Comment:  On a monthly, seasonally-adjusted basis, Mexico's industrial sector has been growing again since mid-2009.  The recovery has come in large part from increased U.S. demand for Mexico's manufactured products.  If the U.S. recovery fails to broaden, the current restocking north of the border could peter out and Mexican exports and production could slow again.  However, recent U.S. indicators, such an unexpected rise in retail sales in February, are making prospects look better.

Patrick Fearon, CFA
Vice President, Fund Management

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