Mexico's April trade deficit widened to a seasonally-adjusted
$323.3 million, after a revised March deficit of $290.2 million and
a February surplus of $400.6 million. In April, the value of
Mexico's exports jumped 1.9% to a record $32.833 billion, mostly
reflecting a strong increase in manufactured exports.
However, the value of Mexico's imports also rose briskly for a
second straight month, reaching their own record of $33.157
billion. The rise in imports came mostly from higher
purchases of foreign consumer goods. On an unadjusted basis,
Mexican exports in April were up 3.7% from the same month one year
earlier, while imports were down 1.5%.
Manufactured goods make up the vast majority of Mexico's
merchandise exports, and in April, they were up 7.1%
year-over-year. The major manufactured goods showing the
biggest increases were industrial machinery and equipment, autos
and auto parts, and professional and scientific equipment.
Crude oil and other petroleum products are the second-most
important category of Mexican exports, and they were down 15.5%
year-over-year in April. Within this category, Mexican crude
oil exports averaged 1.051 million barrels per day, down 17.6% from
April 2013. The average export price for Mexican crude was
$95.02 per barrel, down 4.6% from one year earlier. Finally,
Mexican agriculture exports in April were down 0.9%
year-over-year. Among the agricultural exports posting the
worst performances, cucumber exports were down 23.9%, and coffee
exports were down 22.0%. Among the agricultural exports
posting the best performances, honey exports were up 46.6%, and
citrus exports were up 54.9%.
The report was released Monday by INEGI, the official statistics
Comment: Mexican exports have
risen at an annualized rate of 13.1% over the last three months,
raising some hope that sales abroad are ready to accelerate after
flattening out in 2013. The strength in exports probably
stems in large part from the recent reacceleration in U.S. economic
growth after a weak spot during the winter. If exports keep
rising at a good pace, they could boost industrial activity and
help offset some of the weakness in Mexican domestic demand.
However, it still seems too early to be sure. Over the last
several quarters, every month of increased exports has been
followed by a month of decreased exports. In addition, it is
important to note that imports have been rising even faster than
exports, and that will tend to detract from the overall economic
growth rate. For the time being, I expect the Mexican economy
to keep growing at a pace that is at or below average.
Patrick Fearon, CFA
Vice President, Fund Management