MexECON Blog

April Fixed Investment Falls 1.3 Percent

Gross fixed investment in Mexico fell by a seasonally-adjusted 1.3% in April, matching the revised decline in March.  Investment in equipment and machinery rose 1.5%, reversing its 0.9% decline in the previous month, but that was not enough to offset a sharp drop in construction.  April activity in the construction sector fell 3.9%, after a 1.1% decrease in March.

On an unadjusted basis, total fixed investment in April was up 5.9% from the same month one year earlier.

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

Comment:  The April industrial production report released last month had already indicated a sharp decline in construction at the beginning of the second quarter.  The investment report shows the drop was even worse than initially thought.  Coupled with the big downward revisions to the March construction data, the new figures provide additional evidence that Mexico's tentative economic reacceleration during the spring may be petering out.  Other recent reports from Mexico show continued softness in exports, cooling manufacturing activity, and falling consumer confidence.  It is still too early to know for sure, but it is starting to look like the Mexican economy is coming to a near standstill again, as it did at the beginning of the year.

Patrick Fearon, CFA
Vice President, Fund Management

                                        Gross Fixed Investment in Mexico
                                          Seasonally Adjusted, 2003 = 100
                                                      Source:  INEGI
Fixed Investment 1304

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