MexECON Blog

March Exports Rise 3.4 Percent YOY

Mexico's March merchandise trade balance showed a seasonally-adjusted surplus of $691.2 million, after a revised surplus of $274.9 million in February.  Mexico's trade balance has now been in surplus for four of the last five months, and the surplus in March was the biggest in one year.  According to the report, from the official statistics agency INEGI, the value of Mexico's exports slipped 0.1% in March, after a 6.4% surge in February.  However, imports dropped 1.4%, after a 4.2% increase in the previous month.  On an unadjusted basis, Mexican exports in March were up 3.4% from the same month one year earlier, while imports were up 3.2%.

Manufactured goods make up the vast majority of Mexico's merchandise exports, and in March, they were up 3.0% year-over-year.  The major manufactured goods showing the strongest export gains in March were chemicals, plastics, and autos and auto parts.  Crude oil and other petroleum products are the second-most important category of Mexican exports, and they were up 1.4% year-over-year in March.  On a volume basis, Mexican crude oil exports totaled 1.284 million barrels per day, down 9.8% from March 2011.  However, the average export price for Mexican crude was $114.62 per barrel, up 12.0% from one year earlier.  Finally, Mexican agriculture exports in March were up 14.2% year-over-year.  Among the agricultural products posting the strongest performances, cucumber exports were up 152.6% year-over-year, while frozen shrimp exports were up 84.8%.

Comment:  Over the last two decades, Mexico's trade balance has been in deficit approximately four out of every five months.  The string of recent surpluses is therefore an indication of just how healthy the country's trade sector has become.  On a year-over-year basis, the growth in exports and imports during March may look weak, but that merely reflects the surge in trade activity and the high base of comparison one year earlier.  To better illustrate the most recent trends, I would note that total Mexican exports in the first quarter of 2012 rose at an annualized rate of 17.6%, after growing at a rate of just 5.6% in the last quarter of 2011.  Mexico's new success in trade comes in large part from increased competitiveness and stronger investment over the last decade.  Those advantages have allowed Mexico to post robust export gains even though the economic recovery in the United States, its main market, has been lackluster.  As long as the U.S. economy keeps growing at least modestly, Mexican exports will probably keep growing well, and Mexico's trade balance will probably remain unusually healthy.

Patrick Fearon, CFA
Vice President, Fund Management

                                   Mexico's Merchandise Trade Balance
                                       Seasonally Adjusted, Million US$
                                                       Source:  INEGI
Trade Balance 1203

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