Gross fixed investment in Mexico fell by a seasonally-adjusted
0.4% during September, for its first decline since January.
According to the report, the decline in September stemmed entirely
from a 1.9% decrease in machinery and equipment investment.
That category has now fallen in three of the last four
months. In contrast, September construction rose 0.3%.
Within this category, residential construction continued its
recovery with an increase of 0.7%, marking its eighth straight
monthly gain, and non-residential construction rose by 0.5%,
marking its fourth straight gain.
On an unadjusted basis, total fixed investment in September was
up 5.7% from the same month one year earlier. September
machinery and equipment investment was up 8.5% year-over-year,
while construction was up 4.2%.
The report was released today by INEGI, the official statistics
Comment: Mexican fixed
investment remains on an uptrend, in spite of the small pullback in
September. The recent declines in machinery and equipment
investment bear watching, but on the positive side, homebuilding
continues its strong rebound and private non-residential
construction has probably also been rising. The remaining
weak spot is public works construction. If machinery and
equipment investment starts increasing again, and if private
residential and non-residential construction continue to grow, any
upturn in public works construction would be a particularly good
sign for Mexican employment and overall economic growth.
Patrick Fearon, CFA
Vice President, Fund Management