Gross fixed investment in Mexico fell by a seasonally-adjusted
0.6% in September, after a revised 1.9% decline in August.
Mexican fixed investment has now fallen for five straight
months, and it has declined in eight of the last ten months.
According to the report, September investment in machinery
and equipment fell 0.2%, after a plunge of 4.4% in August and a
rise of 0.6% in July. Investment in new construction fell in
September by 1.6%, after declines of 0.6% in both August and July
and a fall of 0.9% in June.
On an unadjusted basis, total fixed investment in September was
down 5.5% from the same month one year earlier. Machinery and
equipment investment was unchanged year-over-year, but construction
investment was down 8.4%.
The report was released on Friday by INEGI, the official
Comment: Not only did this report show
a continuing slide in construction and overall investment, but the
revisions referred to above served to erase the mid-summer
increases in both categories that had been reported previously.
The data underscore that the construction sector in
particular remains a significant headwind for the Mexican economy.
The October industrial production report due out next week
will provide a more up-to-date read on construction activity, but I
suspect it will continue to show extreme weakness in public works
construction (the result of reduced government spending) and frozen
housing construction (the result of new housing support policies
over the last year).
Patrick Fearon, CFA
Vice President, Fund Management
Gross Fixed Investment in Mexico
Seasonally Adjusted, 2008 = 100