MexECON Blog

Trade Balance Swings Negative Again

Mexico's trade balance reversed again in March, swinging to a seasonally-adjusted deficit of $372.6 million from February's revised surplus of $341.3 million.  In March, the value of Mexico's exports fell 1.0% to $32.096 billion, after a revised 5.1% increase in February.  The decline came mostly from a large drop in petroleum exports.  Meanwhile, the value of Mexico's imports jumped 1.2% to $32.468 billion in March, after a revised 2.8% fall in the previous month.  The rise in imports came mostly from a jump in foreign purchases of raw materials, subcomponents, and other intermediate goods.  On an unadjusted basis, Mexican exports in March were up 4.5% from the same month one year earlier, but imports were up an even stronger 7.2%.

Manufactured goods make up the vast majority of Mexico's merchandise exports, and in March, they were up 6.7% year-over-year.  The major manufactured goods showing the biggest increases were industrial machinery and equipment, professional and scientific equipment, and rubber and plastics.  Exports of autos and auto parts alone were up 10.1% year-over-year.  Crude oil and other petroleum products are the second-most important category of Mexican exports, and they were down 11.1% year-over-year in March.  Within this category, Mexican crude oil exports averaged 1.133 million barrels per day, up 2.7% from March 2013.  However, the average export price for Mexican crude was $93.14, down 10.6% from one year earlier.  Finally, Mexican agriculture exports in March were up 9.8% year-over-year.  Among the agricultural products posting the best performances, fresh strawberry exports were up 49.9%, and avocado exports were up 42.2%.

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

Comment:  As I suggested in my analysis of the trade data last month, it is too early to get excited by the mild upswing in Mexican exports over the last few months.  The rise has been so gradual that it is almost more accurate to say exports have been flat.  At the same time, imports have been on the upswing.  The apparent strengthening in U.S. demand recently could boost Mexican exports if it continues in the coming months, but only time will tell.  For now, it looks like the lack of a truly dynamic export recovery and the ongoing challenges in Mexican domestic demand will probably keep a lid on overall economic growth.

Patrick Fearon, CFA
Vice President, Fund Management

Trade Balance 1403

Exports 1403


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