Economics: Soaring automotive shipments contrast with softening of other manufactured exports, while the super peso stoked demand for imports
Mexico’s strong export performance through August of this year is primarily explained by the extent to which automotive exports continue to grow in response to robust US private consumption, especially the extent to which consumers are snapping up cars and trucks following a period of major shortages. In contrast, Mexico’s shipments of non automotive manufactures are stalling in tandem with the softening of US manufacturing.
On the import side of the ledger, those of non petroleum goods decelerated in August as intermediate goods—70% of all of the country’s non petroleum imports—have been falling at an accelerating pace in response to weakening demand among non automotive manufactures that use such producer goods as inputs. However, imports of both consumer and capital goods have risen significantly on the strength of the internal market and the exchange rate appreciation that has made such goods more affordable domestically. In this week’s Outlook section, we analyze Mexico’s trade performance of recent months and what we can expect going forward.
In economic indicators this past week, we learned that gross fixed investment soared an annual 29.5% in July according to seasonally adjusted figures, with infrastructure works acting as the major source of growth. Private consumption in July grew a seasonally adjusted 4.3% yoy, an increase that was in line with the 4.4% average rate for the first seven months of the year.
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