MexECON Blog

July Fixed Investment Jumps 1.4 Percent

Gross fixed investment in Mexico jumped by a seasonally-adjusted 1.4% in July, after revised increases of 0.8% in each of the previous two months.  The rise in July was the strongest since a 1.6% gain in April.  According to the report, from the official statistics agency INEGI, the increase in July stemmed primarily from a jump in new construction, which posted its strongest rise since early 2010.  Investment in new machinery and equipment rose modestly.  On an unadjusted basis, total fixed investment in July was up 9.3% from the same month one year earlier.

Comment:  Mexican fixed investment has now risen for four straight months, a feat last achieved in mid-2010.  The continued rise in investment is added proof that domestic demand in Mexico still has some momentum, which could help the economy weather the impact of slowing exports as economic activity slows in the key developed countries.  Nevertheless, slower growth overseas and weaker exports will probably weigh on Mexico in the coming months, and economic risks remain weighted to the downside.

Patrick Fearon, CFA
Vice President, Fund Management

                                 Gross Fixed Investment in Mexico
                                   Seasonally Adjusted, 2003 = 100
                                                   Source:  INEGI
Fixed Investment 1107

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