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
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