MexECON Blog

Trade Balance Swings Positive Again

Mexico's trade balance reversed sharply again in February, swinging to a seasonally-adjusted surplus of $430.6 million from January's revised deficit of $2.121 billion.  In February, the value of Mexico's exports jumped 5.2%, offsetting their 3.2% decline in January and setting a new record high of $32.456 billion.  The increase came mostly from a strong rebound in foreign sales of autos and auto parts.  Meanwhile, the value of Mexico's imports dropped 2.9% in February, to $32.026 million, mostly because of a fall in imports of raw materials, subcomponents, and other intermediate goods.  On an unadjusted basis, Mexican exports in February were up 4.7% from the same month one year earlier, while imports were up just 1.6%.

Manufactured goods make up the vast majority of Mexico's merchandise exports, and in February, they were up 5.8% year-over-year.  The major manufactured goods showing the biggest increases were autos and auto parts, professional and scientific equipment, and steel.  Exports of autos and auto parts alone were up 13.4% year-over-year.  Crude oil and other petroleum products are the second-most important category of Mexican exports, and they were down 5.1% year-over-year in February.  Within this category, Mexican crude oil exports averaged 1.276 million barrels per day, up 4.6% from February 2013.  The average export price for Mexican crude was $93.13 per barrel, down 13.0% from one year earlier.  Finally, Mexican agriculture exports in February were up 11.5% year-over-year.  Among the agricultural products posting the best performances, cucumber exports were up 58.0%, and fish and shellfish exports were up 44.0%.  Among the agriculture exports posting the worst performances, onion and garlic exports were down 31.0%, while coffee exports were down 37.6%.

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

Comment:  Because Mexican trade data can be volatile around the turn of the year, it is important to take the February figures with a grain of salt.  Exports may have reached a record high last month, but they were only slightly above the previous high last August.  In other words, sales abroad have risen at only a glacial pace over the last six months.  It may be more accurate to say that they have basically been flat.  Over the same period, imports have been trending downward, but that mostly reflects weak investment and falling consumer spending.  I therefore suspect that, in the coming months, Mexico will continue to lack the foreign and domestic impetus for a significant acceleration in economic growth. 

Patrick Fearon, CFA
Vice President, Fund Management

Trade Balance 1402

Exports 1402

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