<

Key indicators support a recovery in the Mexican economy

Part 3
Key indicators support a recovery in the Mexican economy (Part 3 of 4)

Must-know: Mexican indicators confirm a positive turnaround

Turnaround signals

Earlier this month, several macro indicators started giving faint signals of turnaround for Mexico (EWW). While quarterly GDP was down, PMI started pointing towards a reversal in the negative course.

Must-know: Mexican indicators confirm a positive turnaroundEnlarge Graph

Given that PMI is forward-looking, positive macroeconomic data this month have been key in confirming the positive trend.

Industrial production increasing

Industrial production was dragged by construction activity in July. But manufacturing has increased three months in a row. On annual terms, manufacturing dropped 0.1% in July. But month-over-month, it increased 0.4%—the third increase in a row.

The drag seems limited to the construction sector, which may continue until the government’s infrastructure plan starts kicking in during 2014. On the positive side, auto exports spiked in August. This is one of the largest sectors of Mexican manufacturing.

Inflation remains low

As we mentioned in a previous article, inflation has remained under control and come in lower than expected in August. Inflation will likely remain around 3.5% in the near term.

There may be some marginal upside pressure from the agricultural sector, which will continue until the end of the year. The biweekly indicator did inch higher earlier this week as well.

Keep reading for additional positive indicators supporting a recovery in the Mexican economy (EWW).

The Realist Discussions