Mexico's November merchandise trade balance swung to a
seasonally-adjusted deficit of $1.064 billion, after revised
surpluses of $797.6 million in October and $883.6 million in
September. According to the report, the value of Mexican
exports slumped 4.8% in November, falling to $33.159 billion.
That erased the revised 4.3% export increase in October, and it
marked the third export decline in the last four months.
Virtually all of the decline came in manufactured products.
Meanwhile, November imports rose 0.6%, after a 4.6% rise in the
previous month. That lifted imports to a record $34.222
billion. On an unadjusted basis, Mexican exports in November
were up 2.1% from the same month one year earlier, while imports
were up 6.5%.
Manufactured goods make up the vast majority of Mexico's
manufactured goods, and in November, they were up 4.0%
year-over-year. The major manufactured goods showing the
biggest increases were autos and auto parts, professional and
scientific equipment, and industrial equipment. Crude oil and
other petroleum products are the second-most important category of
Mexican exports, and they were down 13.2% year-over-year.
Within this category, the volume of crude oil exports averaged
1.230 million barrels per day, up 2.5% from November 2013.
The average export price for Mexican crude was $71.64 per barrel,
down 20.1% from one year earlier. Finally, Mexican
agriculture exports in November were up 8.9% year-over-year.
Among the agriculture exports posting the best performances, cattle
exports were up 61.6%, fruit exports were up 37.9%, and pepper
exports were up 32.2%.
The report was released last Friday by INEGI, the official
Comment: Mexican export growth
has softened and become choppy in recent months, but I suspect it
will remain positive for some time yet. As the U.S. economy
strengthens, the demand for Mexican goods will likely continue to
climb. Moreover, the recent weakness in the peso will help
make Mexican exports more price competitive north of the
border. Rising exports, a recovering construction sector, and
an improving labor market will almost certainly keep the Mexican
economy in an expansion phase for the time being.
Patrick Fearon, CFA
Vice President, Fund Management