MexECON Blog

Leading Index Rises in November

Mexico's November index of leading economic indicators rose to 100.0, after revised readings of 99.9 in each of the previous four months.  According to the report, the rise in November stemmed from increases in three of the six subindexes.  The subindex on manufacturing employment rose to 98.9 in November from 98.8 in October, while the subindex on the inflation-adjusted exchange rate advanced to 99.7 from 99.6.  The subindex on U.S. stock prices edged up to 101.3 from 101.2.  All the other subindexes were unchanged in November.  The November subindex on interest rates was stable at 99.8.  The subindex on non-petroleum exports was unchanged at 99.7, and the subindex on Mexican stock prices was flat at 99.6.

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

Comment:  Mexico's leading index is designed so that readings of 100 are consistent with the economy growing at its long-run tendency in the coming months.  When the index is at 100 and rising, as it was in November, it suggests the economy is moving into an expansion phase.  That is consistent with other recent data that point to somewhat stronger foreign trade and expanding factory activity.  However, Mexican economic growth is still being held back by tight government spending, a frozen construction sector, and tepid consumer demand.  Because of those problems, any economic expansion in the near term is likely to be relatively modest.

Patrick Fearon, CFA
Vice President, Fund Management

Leading Index 1311

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