Gross fixed investment in Mexico fell by a seasonally-adjusted
0.2% in May, marking the third straight monthly decline.
Revised figures showed drops of 1.4% in April and 1.3% in
March. The small decline in May came as investment in
machinery and equipment fell 1.6%, erasing its 0.8% increase in the
previous month. On a more positive note, construction
activity rose 1.7% in May, erasing part of its 3.9% decrease in the
On an unadjusted basis, total fixed investment in May was down
0.7% from the same month one year earlier.
The report was released on Wednesday by INEGI, the official
Comment: Mexican investment in
machinery and equipment fell in two of the three months ended in
May, and the June industrial production report released on Friday
showed construction fell in two of the three months ended in June.
The figures show just how significantly the Mexican economy
is slowing. Soft exports, cooling industrial production,
stalled hiring, and faltering domestic demand are all having an
impact. There is still some hope that the economy will
stabilize and perhaps reaccelerate toward the end of the year,
especially if the U.S. economy picks up as expected. However,
any improvement is likely to be modest, and growth is likely to be
muted at best.
Patrick Fearon, CFA
Vice President, Fund Management
Gross Fixed Investment in Mexico
Seasonally Adjusted, 2003 = 100