MexECON Blog

June Trade Deficit Narrows

Mexico's June merchandise trade deficit narrowed to a seasonally-adjusted $428.2 million, after a deficit of $1.1 billion in May.  The value of Mexican exports rose 0.8% to $31.444 billion in June, after declining in each of the previous two months.  In contrast, imports fell 1.2% to $31.873 billion.  On an unadjusted basis, exports in June were up 2.5% from the same month one year earlier, while imports were up 1.7%.

Manufactured goods make up the vast majority of Mexico's merchandise exports, and in June, they were up 3.1% year-over-year.  The major manufactured exports showing the biggest increases were autos and auto parts, metals, food and beverages, and professional and scientific equipment.  Crude oil and other petroleum products are the second-most important category of Mexican exports, and they were up 0.4% year-over-year in June.  Within this category, Mexican crude oil exports totaled 1.090 million barrels per day, down 9.2% from June 2012, but the average export price for Mexican crude rose to $96.90 per barrel, up 6.0% from one year earlier.  Finally, Mexican agriculture exports in June were down 4.9% year-over-year.  Among the agricultural products showing the worst performances, chickpea exports were down 67.1%, cattle exports were down 62.8%, and strawberry exports were down 51.2%.  Among the agricultural exports showing the best performances, citrus exports were up 44.2%, onion and garlic exports were up 37.7%, and bell pepper exports were up 35.3%.

The report was released last week by INEGI, the official statistics agency.

Comment:  Measured in dollars, Mexican exports have basically flattened out over the last several quarters.  Because the peso had been strengthening until recently, exports as measured in pesos have been falling.  The result has been a significant headwind for the Mexican economy.  The June rebound in exports and a recent pullback in the peso are therefore encouraging.  If the U.S. economy continues to expand, Mexico could see a sustained rebound in exports, industrial production, hiring, and consumer spending later in the year.

Patrick Fearon, CFA
Vice President, Fund Management

Trade Balance 1306

Exports 1306

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