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 Business News | April 2007 
Mexico Industrial Output Flat, Fuels Economy Fears
 Greg Brosnan - Reuters
| | Modern Industry. New York, New Workers School (1933). Painted by Diego Rivera. Fresco 1.83 x 1.80 m. |
Mexico City Mexican industrial output was unchanged in February from a year earlier as even the booming construction sector slid, surprising analysts who had expected a rise and fueling concerns about a slowing economy.
Manufacturing fell 0.1 percent after a lull in auto production. The construction sector, which has picked up slack from floundering exporters recently, slid 1.1 percent.
Analysts had expected industrial production to increase by 3.06 percent, according to the median estimate of a Reuters poll.
The weak numbers raised fears that an economic slump could be worse than previously thought. The slump was already expected to cut growth to 3.6 percent this year from 4.8 percent in 2006 due to a slowdown in the U.S. economy, the buyer of most Mexican exports.
This result surprised more than one of us, especially the slide in the construction sector, said Bertrand Delgado, an economist at IDEAglobal in New York. This is going to have a negative effect on first-quarter growth. Delgado lowered his estimate for first-quarter growth to 2.5 percent from a previous forecast of 2.8 percent based on Friday's figures. The government has said it expects growth of between 3 percent and 4 percent for the quarter.
The government said industrial output fell 0.51 percent in February compared with January.
The utilities sector grew 4 percent year-on-year while mining rose 0.2 percent owing to a rise of 3.1 percent in non-oil production and a drop of 2.4 percent in oil output.
Mexican auto production and, more importantly, exports of vehicles to the United States are a mainstay of the economy.
Mexican auto exports fell 11.3 percent in March versus the the same month a year earlier as the U.S. economic slowdown forced the fourth consecutive monthly decline in shipments, industry group AMIA said earlier this week,
While the industry group had previously insisted the drop in exports was just a seasonal glitch, the March data led it to acknowledge that a generalized U.S. economic slowdown could hit Mexico's vehicle sector.
(Additional reporting by Luis Rojas Mena) |
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