MexECON Blog

January Industrial Production Rises 0.8 Percent

Mexico's January industrial production rose by a seasonally-adjusted 0.8%, after gains of 0.9% in December and 0.1% in November.  The rise in January came mostly from the manufacturing sector, where output jumped 1.0%, after a 1.3% surge in December.  Construction activity was up 0.8%, and production by the country's utilities was up 0.7%.  In contrast, mining activity fell 0.4% in January, following a decline of 0.3% in December.  On an unadjusted basis, overall industrial production in the first month of 2012 was up 4.2% from the same month one year earlier.  The report was released today by INEGI, the official statistics agency.

Comment:  The increases in Mexican industrial production during January and December marked the strongest back-to-back gains since early 2010.  Other recent reports from Mexico have shown a rebound in fixed investment at the end of 2011 and falling unemployment at the beginning of 2012.  Taken together, the data show Mexican economic growth has reaccelerated again after a modest slowing late last year.  Because of strengthening U.S. activity and momentum in its own domestic demand, Mexico's economic growth is likely to stay strong for the time being.  In fact, Mexico's near-term economic prospects and fundamentals are among the best of the world's major countries.  Nevertheless, there are risks that the recent acceleration may prove temporary.  A recent survey of purchasing managers suggested manufacturing growth may have started to moderate again in February, and rising inflation could weigh on consumer demand in the coming months. 

Patrick Fearon, CFA
Vice President, Fund Management

                                        Mexican Industrial Production
                                      Seasonally Adjusted, 2003 = 100
                                                     Source:  INEGI
Industrial Output 1201

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