MexECON Blog

February Leading Index Rises 0.3 Percent

Mexico's index of leading economic indicators rose a seasonally adjusted 0.3% in February, marking its 12th straight monthly gain.   In January, the index had risen 0.7%.  In December, it had risen a revised 0.4%.  According to the report, the rise in February came primarily from positive trends in the number of hours worked in the manufacturing sector, inflation adjusted stock prices, the peso exchange rate, and construction activity.  The only negative influence in January was the subindex on oil prices.

Comment:  The long string of increases in the leading index offers additional evidence that the Mexican economy is in a sustained rebound.  That should be no surprise, given that the economy is heavily dependent on demand from the United States.  With the U.S. economy now in recovery, as shown by a surge of inventory rebuilding and a tentative improvement in corporate and consumer demand, Mexico is likely to keep growing well for a while yet.  If the U.S. economic recovery continues to broaden, the Mexican recovery will likely keep strengthening as well.  These trends should help support more strengthening in the peso and in the value of Mexican assets.

Patrick Fearon, CFA
Vice President, Fund Management

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