MexECON Blog

September Industrial Production Rises 0.9 Percent

Mexican industrial production rose by a seasonally-adjusted 0.9% in September, erasing its 0.8% decline in August and marking its strongest increase since June.  According to the report, manufacturing output jumped 1.6% in September, after falling 1.1% in the previous month.  Construction output rose 1.1%, and utility production climbed 0.4%.  Mexican mining output slumped 1.6% in September, for its sharpest fall in almost two years, but the decline came after four straight months of gains, including strong increases of 1.2% in August and 0.7% in July.  On an unadjusted basis, Mexico's overall industrial production in September was up 2.4% from the same month one year earlier.  The report was released today by INEGI, the official statistics agency.

Comment:  As I discussed at the release of the August production report last month, Mexico's industrial sector continues to grow, driven by rising exports and good momentum in domestic demand.  However, output growth is facing a number of risks, and there is a good chance that it will slow in the coming months.  Weak economic growth in Europe and Asia will weigh on activity in North America for some time to come.  If the European debt crisis worsens again, it could spark an outright decline in activity around the globe.  Now, another key risk is that U.S. policymakers may fail to avoid a sharp fiscal tightening that is programmed for year's end, even as high inflation in Mexico threatens to dampen consumer demand. 

Patrick Fearon, CFA
Vice President, Fund Management

                                         Mexican Industrial Production
                                         Seasonally Adjusted, 2003 = 100
                                                    Source:  INEGI
Industrial Output 1209

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