MexECON Blog

November Leading Index Rises to 101.1

In a report last week, Mexico's November index of leading economic indicators rose to 101.1, up from a revised 100.9 in October, 100.8 in October, and 100.7 in each of the three months before that.  According to the report, from the official statistics agency INEGI, the rise in the index in November reflected gains in five of the six subindexes, including manufacturing employment, non-petroleum exports, Mexican stock prices, U.S. stock prices, and interest rates.  The only subindex to decline in November was the one for inflation-adjusted interest rates.  The overall index is now up 1.4% from the same month one year earlier.

Comment:  Mexico's leading index is now at its highest level since the recession of 2008 and 2009.  This new version of the 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 101.1, the index is pointing toward faster-than-normal growth in the coming months.  Mexican exports are still growing well, and are expected to continue doing so as the U.S. economic recovery gathers steam.  In addition, domestic demand in Mexico is now growing also.  While the Mexican economy is unlikely to grow as fast as it did in 2010, it still appears set to grow at a healthy pace in the near term.

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 1011

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