MexECON Blog

September Trade Balance Remains in Surplus

Mexico's September merchandise trade balance showed a seasonally-adjusted surplus of $604.4 million, after a revised surplus of $552.6 million in August.  That marked the first time since early 2012 that the country's exports exceeded its imports for two straight months.  The value of Mexican exports fell to $32.060 billion during September, down 1.3% from the previous month, but that was not enough to reverse the revised increases of 2.2% in August, 1.1% in July, and 0.9% in June.  The trade surplus expanded in September because imports fell more than exports.  Mexico's September imports fell 1.5% to a level of $31.456 billion.  On an unadjusted basis, Mexican exports in September were up 7.2% from the same month one year earlier, while imports were up 5.7%.

Manufactured goods make up the vast majority of Mexico's merchandise exports, and in September, they were up 11.8% year-over-year.  The major manufactured exports showing the biggest increases were steel, autos and auto parts, and professional and scientific equipment.  Exports of autos and auto parts alone were up 23.0% year-over-year.  Crude oil and other petroleum products are the second-most important category of Mexican exports, and they were down 11.7% year-over-year in September.  Within this category, Mexican crude oil exports averaged just 1.195 million barrels per day, down 10.8% from September 2012, while the average export price for Mexican crude fell to $100.45 per barrel, down 1.6% from one year earlier.  Finally, Mexican agriculture exports in September were up 2.0% year-over-year.  Among the agricultural exports posting the best performances, tomato exports were up 34.2%, and avocado exports were up 26.2%.  Among the agricultural exports posting the worst performances, coffee exports were down 54.4%, and frozen shrimp exports were down 45.1%.

The report was released today by INEGI, the official statistics agency.

Comment:  The September trade figures suggest Mexico still has a chance to avoid recession, even though several other indicators point to a faltering economy.  Importantly, Mexican exports appear to remain on a slight upward trend, in spite of the pullback in September.  Nevertheless, plenty of caution is warranted.  A report earlier this week showed that the country's retail sales fell sharply in August, erasing all of their gains in the previous three months.  A report last week showed unemployment rose in September, so consumer demand could stay soft for at least a while longer.  Meanwhile, manufacturing activity has cooled, construction has fallen sharply, government spending is tight, and decision makers all across the economy are worried that fiscal battles in the United States could undermine demand north of the border in the coming months.  It will still take a bit longer to see whether the Mexican economy can keep growing, or whether it will stage a modest and temporary decline.

Patrick Fearon, CFA
Vice President, Fund Management

Trade Balance 1309

Exports 1309


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