Economics: Latest industrial data points to weakening of manufacturing with mining picking up the slack and construction enjoying a slight recovery
Industrial activity figures for February contain decidedly mixed results. Manufacturing, which had previously served as a major driver of the recovery, extended the gradual deceleration trend it has been locked into since a major rebound in activity in the third quarter of last year. But despite the slowing of factory output, which in recent months reflected a similar softening of US industrial activity, secondary sector production in Mexico accelerated 3.5% yoy in February, almost a full percentage point greater than January’s rise, largely in response to increased mining activity and electric power generation.
However, the contribution of extractive industries is part of a very volatile performance, as mining surged 7.7% yoy in February after having contracted 3.8% the previous month. After having turned in the most negative performance of any sector since 2018, construction managed to grow 3.3% in February after increasing 2.4% in January, almost exclusively on the strength of public-sector-dependent civil engineering works, even as private investors remain skittish. And statistical factors that warrant further scrutiny at least partly underpin the outperformance of a key component of utility activity. The generation, transmission and supply of electric energy grew 6.6% in February after growing 5.5% in January, results similar to the averages achieved during much of the segment’s 2022 recovery. But Inegi’s February report downwardly revised the segment’s 2020 and 2021 results, so we can’t be certain if the current rebound is derived from the methodological adjustment or from any increased dynamism on the part of this specific industry.
This week’s report provides an analysis of the recent evolution of industrial activity in Mexico.
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