Mexico's July merchandise trade deficit narrowed to a
seasonally-adjusted $365.7 million, compared with a revised deficit
of $417.4 million in June. The value of Mexican exports rose
0.9% to $31.721 billion in July, marking the second straight
monthly increase. Imports rose 0.8% to $32.067 billion, after
a sharp decline in the previous month. On an unadjusted
basis, exports in July were up 6.3% from the same month one year
earlier, while imports were up 9.6%.
Manufactured goods make up the vast majority of Mexico's
merchandise exports. In July, they were up 5.6%
year-over-year. The major manufactured exports showing the
biggest increases were food and beverages, consumer metal products,
and chemicals. Crude oil and other petroleum products are the
second-most important category of Mexican exports, and they were up
13.3% year-over-year in July. Within this category, Mexican
crude oil exports totaled 1.210 million barrels per day, up 7.7%
from July 2012. The average export price for Mexican crude
rose to $100.67 per barrel, up 5.6% from one year earlier.
Finally, Mexican agriculture exports in July were down 6.3%
year-over-year. Among the agricultural products showing the
worst performances, cattle exports were down 57.1%, chickpea
exports were down 49.3%, and coffee exports were down 44.2%.
Among the agricultural exports showing the best performances,
avocado exports were up 35.3%, mango exports were up 48.3%, and
plantain exports were up 87.9%.
The report was released today by INEGI, the official statistics
Comment: Mexican exports have
virtually stalled over the last year and a half, putting a big
damper on industrial activity and hiring. It is therefore
encouraging that sales abroad increased for a second straight month
during July. Based on other recent reports, it appears the
improvement has already produced a marginal acceleration in
manufacturing. Nevertheless, it is not at all clear that U.S.
demand can strengthen enough for trade to really boost the Mexican
economy. Mexico is also facing domestic headwinds, such as
tight government spending, shifting policies that have reduced
construction activity, and a stagnant labor market that has made
consumers more cautious about spending. The most likely
scenario going forward is that the Mexican economy will continue to
grow at a below-average pace for a while yet.
Patrick Fearon, CFA
Vice President, Fund Management