Economics: Industrial recovery is underway, but remains weak

MEXICO - Report 19 Jul 2021 by Mauricio Gonzalez and Francisco González

Industrial activity in May 2021 posted a mere 0.1% seasonally adjusted monthly increase. This paltry result can mainly be attributed to a 0.7% contraction in manufacturing. Percentage changes relative to a year ago can often appear impressive, but can also be deceiving given the low and distorted base of comparison with the period when industry was largely shut down due to the Covid-19 pandemic.

Of all the industrial activities, only mining has returned to its pre-pandemic levels. Although construction and electricity, gas, and water posted positive numbers in May, they are still below their pre-pandemic levels. The rest of the sectors that represent 18% of Mexico's GDP and 57% of industrial GDP are clocking in at lower levels than in December 2019. For January-May 2021, industry underperformed its 2019 results by 4.5%, principally due to the construction sector, which declined 13.1% compared to the year prior to the pandemic, while manufacturing remains 2.8% below its 2019 level.

Manufacturing has faced supply chain disruptions in the past few months, due to the shortage of key inputs such as semiconductors in the case of the automotive industry, and the significant increase in the price of raw materials. This is cause for concern, since manufacturing is one of the main drivers of growth projections, especially in export-oriented industries.

Now read on...

Register to sample a report

Register
Sign-in
Forgot your password?
Copyright 2024 GlobalSource Partners. All rights reserved. This report is prepared for GlobalSource Partners’ clients and may not be redistributed, reproduced, stored in a retrieval system, retransmitted or disclosed, in whole or in part, or in any form or manner, without the express written consent of GlobalSource Partners. This report is distributed simultaneously to our website and other portals used by GlobalSource Partners. The information herein was obtained from various sources and is believed to be reliable but GlobalSource Partners does not warrant its completeness or accuracy. Neither GlobalSource Partners nor any Country Analyst, officer or employee accepts any liability whatsoever for any direct, indirect or consequential damages or losses rising from any use of this report or its contents.