MexECON Blog

February Fixed Investment Rises 1.4 Percent

Gross fixed investment in Mexico jumped by a seasonally-adjusted 1.4% in February, erasing the revised declines of 0.4% in both January and December.  The rise in February reflected increased activity in both machinery and equipment investment and construction.  The rise in construction came entirely from an expansion in home building, though the increase in that category was only the third in the last eleven months.

On an unadjusted basis, total fixed investment in February was down 0.5% from the same month one year earlier.  Investment in machinery and equipment was up 3.3%, but construction was down 2.7%.

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

Comment:  Because of the long downtrend in Mexican construction, it is much too early to find comfort in the February increase in that category.  The more timely report on March industrial production on Monday will show whether construction activity has been able to rise for a second straight month.  Even if it does, however, it will take a few more months of increases to know if a sustainable uptrend is finally in place.  Until we see a sustained strengthening in investment in general, and in construction in particular, we should expect Mexican economic growth to remain sluggish.

Patrick Fearon, CFA
Vice President, Fund Management

                                       Gross Fixed Investment in Mexico
                                         Seasonally Adjusted, 2008 = 100
                                                       Source:  INEGI
Fixed Investment 1402

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