MexECON Blog

November Industrial Production Rises 0.2 Percent

Mexico's November industrial production rose by a seasonally-adjusted 0.2%, after a revised 0.5% gain in October and a flat performance in September.  The rise in November came mostly from a healthy 0.7% expansion in the key manufacturing sector.  Mexican factory output has now risen for three straight months.  In addition, November construction output rose 0.8%, marking its second straight increase and demonstrating that private building continues to recover strongly.  In contrast, November mining production declined 0.4%, for its ninth decrease in the last twelve months, and utility production fell 1.1%, for its sharpest pullback since early 2013.

On an unadjusted basis, overall industrial production in November was up 1.8% from the same month one year earlier.  Construction output was up 5.3% year-over-year, and manufacturing output was up 3.6%.  Utility production was up 0.7% year-over-year, but mining production was down 5.6%.

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

Comment:  Mexican industrial activity continues to trend upward, as rising exports prompt increased manufacturing and an ongoing recovery in residential and commercial building boosts construction.  The main weak spot has been mining, where decades of low investment and mismanagement have prevented the country from developing new oil and gas fields to replace those being depleted.  The government's recent reform to allow private-sector investment in energy development is aimed at reversing that trend.  However, the process will take time, especially now that global energy prices have fallen so much.

Patrick Fearon, CFA
Vice President, Fund Management

Industrial Production 1411Industrial Production Detail on Construction 1411

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