MexECON Blog

March Trade Deficit Narrows

Mexico's March merchandise trade deficit narrowed to a seasonally-adjusted $456.0 million, after a revised February deficit of $559.7 million.  According to the report, released Friday by the official statistics agency INEGI, the total value of Mexican exports rose in March to a record high of $31.796 billion.  Sales abroad were up 1.6% from the previous month, after an increase of 5.2% in February and a decline of 4.9% in January.  Imports also set a record high in March, rising to $32.252 billion.  Imports were up 1.2%, after a February decline of 0.1%.  On an unadjusted basis, March exports were down 1.8% from the same month one year earlier, while imports were down 2.3%.

Manufactured goods make up the vast majority of Mexico's merchandise exports, and in March, they were up 2.0% year-over-year.  The major manufactured products showing the biggest increases were metal products, food and beverages, and scientific and professional equipment.  Crude oil and other petroleum products are the second-most important category of Mexican exports, and they were down 19.8% year-over-year in March.  Within this category, Mexican crude oil exports totaled 1.103 million barrels per day, down 14.1% from March 2012.  The average export price for Mexican crude was $104.21, down 9.1% from one year earlier.  Finally, Mexican agriculture exports fell 3.0% year-over-year in March.  Among the agricultural products with the worst performances, cattle exports were down 39.0%, tomato exports were down 24.5%, and coffee exports were down 25.9%.  Among the agricultural products with the best performances, citrus exports were up 114.6%, and melon exports were up 88.1%.

Comment:  The second straight rise in exports and the rebound in imports are further evidence that Mexico is at least partially recovering from its economic soft spot at the turn of the year.  However, many analysts expect U.S. economic growth to slow during the spring, which would likely weigh on Mexico's trade figures.  Also, some sectors of the Mexican economy are still weak.  Going forward, the Mexican economy will probably keep growing, but only at a moderate rate.

Patrick Fearon, CFA
Vice President, Fund Management

Trade Balance 1303

Exports 1303

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