MexECON Blog

April Exports Rise 11.6 Percent YOY

Mexico's April merchandise trade balance swung to a seasonally-adjusted deficit of $433.5 million, after revised surpluses of $679.0 million in March and $274.8 million in February.  According to the report, from the official statistics agency INEGI, the value of Mexico's exports rose 0.2% in April, after a flat performance in March.  However, imports jumped 3.8%, reversing a 1.3% decline in the previous month.  On an unadjusted basis, Mexican exports in April were up 11.6% from the same month one year earlier, while imports were up 12.1%.

Manufactured goods make up the vast majority of Mexico's merchandise exports, and in April, they were up 13.9% year-over-year.  The major manufactured goods showing the strongest export gains in April were chemicals, industrial machinery and equipment, 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 April.  Within this category, Mexican crude oil exports totaled 1.243 million barrels per day, up 1.4% from April 2012.  The average export price for Mexican crude was $111.03 per barrel, up 1.6% from one year earlier.  Finally, Mexican agriculture exports in April were up 10.9% year-over-year.  Among the agricultural products posting the strongest performances, bell pepper exports were up 68.3% year-over-year, and fresh strawberry exports were up 64.4%.

Comment:  In spite of the trade balance slipping back into deficit in April, Mexico's trade sector remains strong.  In fact, the jump in imports that pushed the balance into deficit during April stemmed in large part from stronger purchases of capital equipment and intermediate goods from abroad.  That likely reflects expectations of further export gains in the near future, as well as continued strong growth in domestic demand.  As I have noted in the past, Mexico's recent 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 in the face of a lackluster economic recovery in the United States, its main market.  Mexican exports could get further support in the near term from the fall in the value of the peso over the last month.  However, the fall in the peso can be traced to the worsening European debt crisis.  If the situation in Europe worsens much further, economic activity around the world would likely falter and Mexican exports would likely slow precipitously.

Patrick Fearon, CFA
Vice President, Fund Management

                                  Mexico's Merchandise Trade Balance
                                      Seasonally Adjusted, Million US$
                                                    Source:  INEGI
Trade Balance 1204

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