MexECON Blog

December Industrial Output Rises 0.7 Percent

In a report on Friday, Mexico's December industrial production rose by a seasonally-adjusted 0.7%, posting its strongest increase since last March.  In addition, November's output was revised upward to show an increase of 0.6%.  According to the report, from the national statistics agency INEGI, the rise in overall output in December came in large part from a 1.3% jump in manufacturing output.  The factory sector has been performing very well recently, and its jump in December followed a strong 1.1% gain in November.  In addition, mining output and utility production both posted gains of 0.5% in December.  The only major industrial sector to post a decline in activity during December was construction, which was down 0.6%.  Overall industrial production in Mexico has now risen in 14 of the last 16 months.  On an unadjusted basis, overall output in December was up 4.9% from the same month one year earlier.

Comment:  Mexico's industrial sector continues to rise at a healthy pace, with the increases driven now by both foreign demand and improving consumption and investment at home.  As the U.S. economy looks set to grow faster and domestic demand appears to be improving, the near-term outlook for Mexico's industrial activity remains positive.  The main risk now is probably that the strengthening peso could eventually put a damper on manufacturing exports.  In addition, rising violence by drug cartels has the potential to reduce investment and weigh on overall economic activity as well.

Patrick Fearon, CFA
Vice President, Fund Management

              Mexican Industrial Production
             Seasonally Adjusted, 2003 = 100
                          Source:  INEGI
Industrial Output 1012

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