MexECON Blog

October Leading Index Rises to 101.0

Mexico's October index of leading economic indicators rose to 101.0, up from 100.9 in September and 100.8 in both August and July.  According to the report, from the official statistics agency INEGI, the rise in the index during October reflected improvements in five of the six subindexes, including non-petroleum exports, Mexican stock prices, U.S. stock prices, inflation-adjusted exchange rates, and interest rates.  The subindex on employment in the manufacturing sector was unchanged.  The overall index is now up 1.7% from the same month one year earlier.

Comment:  Mexico's leading index has now erased its mid-summer dip, and it currently stands at its highest point in the country's current economic rebound.  This new version of Mexico's leading index is designed so that readings of 100.0 are consistent with the long-run tendency of the economy, so at the current reading of 101.0, the index is pointing toward faster-than-normal growth in the coming months.  That is consistent with numerous fundamental indicators, such as improved demand in the United States, rebounding consumption spending at home, and the first signs of improved domestic investment.  While Mexico's economy is unlikely to repeat its extraordinarily strong 2010 performance, growth is still likely to be good in 2011.

Patrick Fearon, CFA
Vice President, Fund Management

                           Mexico's Index of Leading Economic Indicators
                                 Based on Seasonally-Adjusted Subindexes
                                              Long-Run Tendency = 100
                                                        Source:  INEGI
Leading Index 1010

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