MexECON Blog

February Industrial Production Rises 0.3 Percent

Mexico's February industrial production rose by a seasonally-adjusted 0.3%, after a revised increase of 0.6% in January and a revised decline of 0.4% in December.  According to the report, the rise in February came in part from a 1.2% jump in construction output.  That increase was barely enough to erase the sector's 1.1% fall during January, but it did mark the sector's third expansion in the last four months.  Mining production rose 0.5% in February, after a 0.1% gain in the previous month.  Output in the key manufacturing sector inched ahead by just 0.2% in February, after a jump of 2.8% in the first month of the year.  In contrast, February utility output fell 0.6%, for its second straight monthly decline.

On an unadjusted basis, overall industrial production in February was up a modest 0.7% from the same month one year earlier.  Manufacturing production was up 2.3% year-over-year, and output was up 0.2% in both the mining and utility sectors.  However, construction output was down 2.4%.

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

Comment:  Although the second straight monthly rise in manufacturing production during February is encouraging, the slowdown in the rate of increase is a yellow flag.  The deceleration may reflect the recent softness in Mexican exports and continuing problems in domestic demand.  One key domestic problem has been construction, and even the February surge in that sector was less than meets the eye.  Details in the report show that the rise in construction output came mostly from increased activity in the construction trades.  In contrast, the erection of new buildings and public works projects remained in the doldrums.  On balance, the data still point to only muted growth in the industrial sector and the Mexican economy in general.

Patrick Fearon, CFA
Vice President, Fund Management

Industrial Production 1402

Industrial Production Detail on Construction 1402


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