MexECON Blog

April Fixed Investment Jumps 1.9 Percent

Gross fixed investment in Mexico jumped by a seasonally-adjusted 1.9% in April, and investment in March was revised upward to show a strong rise of 1.4%. Mexican fixed investment has now risen for six straight months.  According to the report, from the official statistics agency INEGI, the rise in April stemmed entirely from a 4.0% jump in new machinery and equipment investment.  Construction activity decreased 0.3%.  On an unadjusted basis, total fixed investment in April was up 8.5% from the same month one year earlier.

Comment:  The continued rise in investment during April reflects the good momentum in Mexico's domestic demand this spring.  However, because of the recent deterioration in global economic conditions, the investment data for May and June may look substantially weaker when it is released later in the summer.  Rising exports and healthy consumer spending continue to encourage investment for the time being, but company managers could change their mind about future capital replacements or expansions if the European debt crisis worsens, Asian economic growth slows further, or U.S. employment gains remain tepid. 

Patrick Fearon, CFA
Vice President, Fund Management

                               Gross Fixed Investment in Mexico
                                 Seasonally Adjusted, 2003 = 100
                                             Source:  INEGI
Fixed Investment 1204

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