MexECON Blog

February Recovery for Exports and Trade Balance

Mexico's February merchandise trade deficit narrowed to a seasonally-adjusted $675.9 million, after expanding dramatically in January to a revised $2.175 billion.  According to the report, released today by the official statistics agency INEGI, the value of Mexican exports jumped 4.9% in February, almost erasing the 4.7% decline in January and the 0.6% decrease in December.  Imports edged down 0.1%, after jumping 4.0% in the previous month.  On an unadjusted basis, Mexican exports in February were down 2.9% from the same month one year earlier, while imports were down 1.5%.

Manufactured goods make up the vast majority of Mexico's merchandise exports, and in February, they were down 1.5% year-over-year.  The major manufactured products showing the biggest export declines were metals, industrial equipment and machinery, and electronic goods.  Crude oil and other petroleum products are the second-most important category of Mexican exports, and they were down 9.3% year-over-year in February.  Within this category, Mexican crude oil exports totaled 1.220 million barrels per day, down 0.7% from February 2012.  The average export price for Mexican crude was $107.29 per barrel, down 2.8% from one year earlier.  Finally, Mexican agriculture exports fell 0.4% year-over-year in February.  Among the agricultural goods posting the best performances, tomato exports were up 13.5% and avocado exports were up 12.7%.  Among the agricultural products with the worst performances, however, coffee exports were down 19.9%, cucumber exports fell 17.1%, and cattle exports declined 16.5%.

Comment:  The rebound in Mexican exports during February is consistent with other recent evidence that part of the economy's weakness at the turn of the year reflected temporary caution ahead of the U.S. "fiscal cliff."  Now that the fiscal tightening in the United States has proven less than feared, Mexican exports have rightly improved.  The reacceleration in U.S. economic growth during the first quarter suggests exports could continue to rise.  However, Mexican sales abroad are unlikely to grow as strongly as they did at the beginning of the current expansion phase.  Recent indicators out of Mexico show the economy is facing more challenges as the economic cycle matures.  The question is whether those challenges will result in merely a slowdown in economic growth or an outright retreat in the coming months and quarters.

Patrick Fearon, CFA
Vice President, Fund Management

Trade Balance 1302

Exports 1302

Export Growth 1302

0 comment(s) for “February Recovery for Exports and Trade Balance”

    Leave a Comment