MexECON Blog

March Industrial Production Rebounds

Mexico's March industrial production jumped 1.6%, erasing the revised 1.4% decline in February and marking the strongest monthly gain since early 2010.  The rebound in March came in large part because manufacturing output rose a strong 1.1%, erasing a 1.0% fall in the previous month.  Construction output jumped 2.2%, almost erasing its decline in February, and utility production rose 0.9%.  However, mining production slumped 2.2%.  On an unadjusted basis, overall industrial production in March was up 3.1% from the same month one year earlier.  The report was released today by INEGI, the official statistics agency.

Comment:  While it was worrying that Mexico's industrial production slumped so sharply in February, it is encouraging that output grew more than enough in March to offset that decline. Recent data has shown that Mexican exports reaccelerated at the beginning of 2012, so it should be no surprise that the country's industrial activity remains strong.  Other recent reports suggest domestic demand is also on the upswing and could provided an added boost to the industrial sector.  In April, for example, a purchasing managers' report on the manufacturing industry and a key index of consumer optimism both posted healthy gains.  In the wake of elections in France and Greece, the main risk is that the European debt crisis is worsening again and could put a damper on global demand.  Nevertheless, the near-term outlook for North America remains relatively bright, so Mexican industrial production is likely to keep growing in the coming months.

Patrick Fearon, CFA
Vice President, Fund Management

                                    Mexican Industrial Production
                                  Seasonally Adjusted, 2003 = 100
                                                  Source:  INEGI
Industrial Output 1203

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