MexECON Blog

March Export Rise Confirmed

In a report on Monday, the official statistics agency INEGI confirmed that Mexico's March merchandise trade balance came in at a seasonally-adjusted surplus of $848.3 million, easily erasing the revised deficit of $251.2 million in February.  As discussed on this blog when the preliminary estimate was released a couple of weeks ago, the surplus in March was the fourth in the last five months, and it was the biggest surplus in more than 15 years.  Exports from Mexico jumped 3.8% in March, offsetting the 0.4% decline in February and marking the strongest monthly export gain since last summer.  Imports into Mexico fell 0.1% in March, after increases of 1.3% in February and 3.5% in January.  On an unadjusted basis, Mexican exports in March were up 20.1% from the same month one year earlier, while imports were up just 16.3%.

Manufactured goods continue to make up the vast majority of Mexico's merchandise exports, and they were up 15.9% year-over-year in March.  The major manufacturing categories showing the strongest export growth were steel and metals, food and beverages, and autos and auto parts.  Crude oil and other petroleum products are the second-most important category of Mexican exports, and they jumped 49.3% year-over-year in March.  On a volume basis, Mexican crude oil exports totaled 1.424 million barrels per day, up 7.0% from March 2010.  On a value basis, the average export price of Mexican crude oil rose to $102.05 per barrel, up 41.5% from one year earlier.  Finally, Mexican agriculture exports in March were down 6.3% year-over-year, almost certainly reflecting the extraordinary freezes that destroyed many vegetable crops in early February.  Among the agricultural products posting the biggest declines, foreign sales were down 43.0% for cucumbers, 36.4% for strawberries, and 27.3% for tomatoes.

Comment:  Mexico's trade sector is booming, and it is now performing better than it has since just after the big peso devaluation in the mid-1990s.  Just as important, rapidly rising exports have helped boost industrial production and stabilized the labor market, which in turn has prompted a budding recovery in consumption spending and the first signs of rebounding investment.  Nevertheless, export growth will eventually moderate, and exports could even slow rapidly if the peso continues to strengthen or there is another global crisis such as the recent Japanese earthquake and the political conflicts in the Arab world.

Patrick Fearon, CFA
Vice President, Fund Management

           Mexican Merchandise Exports
          Seasonally Adjusted, Million US$
                          Source:  INEGI
Exports 1103 Revised

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