MexECON Blog

March Exports Rise 39.0 Percent YOY

In a preliminary estimate, Mexico's merchandise trade balance in March showed a surplus of $237 million.  The surplus was virtually unchanged from February, but it was a big improvement from the surplus of $113 million in the same month one year earlier.  According to the report, Mexico's exports in March were up a whopping 39.0% year-over-year, while imports were up 38.6%.  Manufactured goods accounted for more than four-fifths of Mexico's exports in March, and exports of these products were up 35.6% year-over-year.  The increase was attributable in large part to higher foreign sales of plastics, metal products, industrial equipment, and autos.  Petroleum products made up one-eighth of the country's exports in March, and they were up 71.7% year-over-year.  The volume of Mexico's petroleum exports bucked its recent trend by rising to 1.267 million barrels per day, and prices were almost twice as high as in March 2009.  Finally, March agricultural exports were up a strong 23.2% year-over-year.  The strongest agricultural exports included tomatoes, up 84.0%, and strawberries, up 66.3%.

Comment:  Mexico's recent trade surpluses have been impressive, especially since the country runs trade deficits more often than not.  Mexico relies heavily on imported intermediate goods and, to a lesser extent, on imported raw materials.  Therefore, increased exports are often offset with purchases from abroad.  Inventory rebuilding and some modest increase in final demand in the United States have boosted Mexican exports, and the country's industrial sector is now in a strong recovery.  Going forward, the recovery is likely to broaden and solidify, which should be a positive for Mexican asset prices and the peso. 

Patrick Fearon, CFA
Vice President, Fund Management

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