MexECON Blog

December Exports Rise 8.2 Percent YOY

Mexico's December merchandise trade surplus fell to a seasonally-adjusted $202 million, after a revised surplus of $541.3 million in November.  That marked the first back-to-back trade surpluses since the beginning of 2011.  According to the report, from the official statistics agency INEGI, Mexican exports rose 0.5% in December, after a rise of 2.2% in November.  Imports rose 1.7%, erasing a decline of 1.1% in the previous month.  On an unadjusted basis, Mexican exports in December were up 8.2% from the same month one year earlier, while imports were up 7.9%.

Manufactured goods have long made up the vast majority of Mexico's merchandise exports, and in December, there were up 6.2% year-over-year.  The major manufacturing goods showing the strongest export growth in December were plastic and rubber products, autos and auto parts, and chemicals.  Crude oil and other petroleum products are the second-most important category of Mexican exports, and they were up 12.4% year-over-year in December.  On a volume basis, Mexican crude oil exports totaled 1.282 million barrels per day, down 14.6% from December 2010.  On a value basis, however, the average export price for Mexican crude was $104.97 per barrel, up 28.9% from one year earlier.  Finally, Mexican agriculture exports in December were up 12.3% year-over-year.  Among the agricultural products posting the best gains, coffee exports were up 80.5% year-over-year, and fresh strawberry exports were up 55.1% year-over-year.

For full-year 2011, Mexico's trade balance showed a deficit of $1.166 billion.  Total exports in 2011 were up 17.2%, while imports were up 16.4%.

Comment:  The return to trade surpluses is a positive for Mexico.  The country usually has a trade deficit, as shown by the full-year data, but Mexico has now had seasonally-adjusted surpluses in 7 of the last 14 months.  Annual export growth has slowed markedly from the increases of 20%, 30% or even more at the beginning of the current recovery.  However, import growth has moderated as well.  That could reflect the surge in foreign investment over the last five years or so, as companies moved more and more production to Mexico - including production previously done in Asia.  As long as the U.S. economy continues to grow, Mexican exports will probably keep rising, and trade will likely be more balanced than in the past.

Patrick Fearon, CFA
Vice President, Fund Management

                                   Mexico's Merchandise Trade Balance
                                        Seasonally Adjusted, Million US$
                                                       Source:  INEGI
Trade Balance 1112

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