Economic news still muddled alongside the odd instance of pre-pandemic activity levels
Data released in July provided plenty of evidence of strong percentage growth from multiple indicators, although most of those gains were achieved thanks to the easy comparison against the months of 2020, when Mexico and the economies of its main trading partners saw activity plummet as the authorities, companies and individuals tried to contend with the pandemic. One notable exception was last week’s trade report for June, which delivered not only a yawning trade surplus and robust growth compared to a year earlier, but also a 12.6% increase in export activity above the comparable pre-pandemic level of June 2019.
In another positive development, private expenditure surged 25.3% in April, with growth extending to domestically produced products and services as well as imported goods in what proved to be that indicator’s first expansion in 17 months. However, the corresponding index remains below the average reading from the 13 months prior to the onset of the pandemic-related restrictions.
For the first five months of the year, industrial output stayed 4.5% below levels of the same five-month period of 2019 largely because construction activity remained severely depressed, and manufacturing also remained weaker. Manufacturing has been tripped up in recent months by supply chain disruptions for crucial inputs such as semiconductors that have been taking an especially hard toll on automotive assembly and other industries, as well as a broader surge in commodity prices.
Last week’s preliminary report from Inegi on second quarter GDP provided more encouraging data on several levels. Between April and June, Gross Domestic Product increased by almost 20%, with all major components expanding compared to the same quarter of 2020.
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