MexECON Blog

March Leading Index Rises 1.6 Percent

Mexico's March index of leading economic indicators rose a seasonally-adjusted 1.6%, accelerating from revised increases of 0.8% in February and 0.4% in both January and December.  The index has now risen for 13 straight months, though it has not yet recouped all of its losses since peaking in mid-2008.  According to the report, issued Friday by the national statistics agency INEGI, the rise in March stemmed mostly from increases in the subindexes on hours worked in Mexico's manufacturing sector, the inflation-adjusted exchange rate, inflation-adjusted stock prices, and construction activity.

Comment:  With the leading index now having risen for more than a year, Mexico's economic recovery looks to be on ever firmer ground.  The country's economic rebound has come primarily from increased U.S. demand, but there are some signs that domestic demand is starting to firm as well.  Of course, there are risks, such as the financial panic about possible debt defaults in Europe.  Nevertheless, the balance of risks is still on the upside, which should in time support renewed strengthening in the peso and in the value of Mexican assets.

Patrick Fearon, CFA
Vice President, Fund Management

                   Mexico's Index of Leading Economic Indicators
                                Seasonally Adjusted, 2003=100
                                               Source:  INEGI
Leading Index 1003

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