Mexico's March industrial production declined by a
seasonally-adjusted 0.1%, after revised increases of 0.3% in
February and 0.5% in January. The decrease in March reflected
a 0.5% fall in mining production and a 0.3% drop in manufacturing
output. In contrast, March construction output eked out a
0.1% gain, and utility production rose 0.3%.
On an unadjusted basis, overall industrial production in March
was up a modest 3.4% from the same month one year earlier.
Manufacturing production was up a robust 6.8% year-over-year, and
utility output was up 4.1%. However, mining production was up
just 0.6% year-over-year, and construction output was down
The report was released today by INEGI, the official statistics
Comment: The trend in Mexican
industrial production is suggestive of an economy that just can't
seem to accelerate. Mexican exports in recent months have
been a bit stronger than in 2013, which helps explain the good
year-over-year gain in manufacturing, but the improvement in sales
abroad has been limited. At the same time, construction
remains in a deep freeze, and consumer demand is weak. These
problems are likely to continue weighing on the industrial sector
and the overall economy in the near term.
Patrick Fearon, CFA
Vice President, Fund Management