MexECON Blog

April Exports Rise 43.2 Percent YOY

In a preliminary estimate, Mexico's April merchandise trade balance moved to a seasonally-adjusted surplus of $273.8 million.  The balance had been in deficit for each of the previous three months.  On a month-to-month basis, seasonally-adjusted exports rose 6.2% in April, accelerating from a gain of 3.6% in March.  Seasonally-adjusted imports rose 2.7%, decelerating from a rise of 5.2% in the previous month.  The extent of Mexico's trade rebound is also illustrated by comparing unadjusted figures to the same month one year earlier.  On that basis, Mexico's exports in April were up a very strong 43.2% year-over-year, while imports were up 44.0%.  Manufactured goods, which make up the vast majority of Mexico's exports, were up 39.9% year-over-year in April, with the increase driven mostly by higher foreign sales of metal products, industrial equipment, and autos.  Petroleum products are the second most important category of Mexico's exports, and they rose 73.3% year-over-year.  On a volume basis, Mexico's petroleum exports again bucked their recent trend by rising to 1.302 million barrels per day, and prices were almost twice as high as one year earlier.  Finally, April agriculture exports rose 24.3% year-over-year.  That rise was driven in large part by an 89.4% rise in the value of tomato exports, a 52.2% rise in legume exports, and a 33.7% rise in miscellaneous fruit exports. 

Comment:  With this report, the MexECON Blog will begin to put more emphasis on Mexico's seasonally-adjusted trade figures.  That should provide a better perspective on the most recent trends, and it will make it easier to compare those trends with reported U.S. figures.  Mexico's seasonally-adjusted trade surplus in April is impressive because the country runs trade deficits more often than not (see chart below).  Mexico relies heavily on imported intermediate goods and, to a lesser extent, on imported raw materials.  Therefore, increased exports are often offset by purchases from abroad.  Inventory rebuilding and increased corporate and consumer demand in the United States continue to boost Mexican exports, and the country's industrial sector is now in a strong recovery.  Although there are risks arising from the renewed concerns about debt defaults in Europe, it is probably still too early to know if the Mexican recovery will be short-circuited.  At this point, the recent positive trends still look more likely to continue than to falter.

Patrick Fearon, CFA
Vice President, Fund Management

                                              Mexico's Trade Balance
                                        Seasonally Adjusted, $ Millions
                                                     Source:  INEGI
Trade Balance 1004 Prelim

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