MexECON Blog

October Fixed Investment Rises 0.4 Percent

Fixed investment in Mexico rose by a seasonally-adjusted 0.4% during October, according to a report earlier this week from the official statistics agency INEGI.  The increase in October was the fourth in a row, after revised gains of 1.2% in September and August and a jump of 2.5% in July.  The rise in October stemmed primarily from a 1.0% increase in machinery and equipment investment.  Investment in new construction was up just 0.2%.  On an unadjusted basis, total fixed investment in October was up 5.3% from the same month one year earlier.

Comment:  Fixed investment in Mexico seems to finally be on a sustained uptrend.  Although the rate of increase has been slowing since mid-summer, it is impressive that fixed investment has now increased in ten of the last twelve months.  Mexico's economic rebound rests on a much broader foundation than just a few months ago.  Rising exports continue to be the main source of growth, but domestic consumption and investment are now rising as well.  The fastest overall economic growth of this cycle may well be past, but all indications suggest that the Mexican economy will continue to grow at a good pace in the coming months.

Patrick Fearon, CFA
Vice President, Fund Management

                           Gross Fixed Investment in Mexico
                             Seasonally Adjusted, 2003 = 100
                                            Source:  INEGI
Fixed Investment 1010

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