MexECON Blog

April Fixed Investment Rises 1.3 Percent

Gross fixed investment in Mexico rose by a seasonally-adjusted 1.3% during April, erasing its revised 0.1% fall in March and almost matching its revised 1.4% gain in February.  The rise in April came as investment jumped in each of the two key categories.  Investment in machinery and equipment rose a strong 2.4%, reversing its 1.7% decline in the previous month.  Investment in construction also jumped 2.4%, reversing its 0.7% fall in the previous month and marking its best increase since at least 2011.

On an unadjusted basis, total fixed investment in April was down 3.5% from the same month one year earlier.  Investment in machinery and equipment was down 4.5% year-over-year, while construction was down 2.9%.

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

Comment:  The best news in today's report was the strong increase in April construction activity.  Revised figures show construction in the previous several months was also stronger than initially thought.  That is important because a plunge in homebuilding and a sharp decline in public works have been weighing heavily on the Mexican economy for the last two years.  Rebounding exports are already helping to spur stronger economic activity, but the economy could improve even more dramatically if residential construction starts to recover and public investment in infrastructure starts to rise again.  Tomorrow's report on industrial production will therefore be particularly important.  It will show whether the upswing in construction continued into May.

Patrick Fearon, CFA
Vice President, Fund Management

                                      Gross Fixed Investment in Mexico
                                        Seasonally Adjusted, 2008 = 100
                                                     Source:  INEGI
Fixed Investment 1404

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