Mexico: Economic activity decelerates as industrial sector slows
June 28, 2011
In April, economy activity increased 2.4% over the same month last year, according to the monthly indicator for economic activity (IGAE, Indicador Global de la Actividad Economica). The figure marked the third consecutive month of subdued growth rates and undershot market expectations, which had economic activity rising 2.9%. Owing to the moderate reading, annual average growth in economic activity continued to point down, falling from 5.5% in March to 5.1% in April. The deceleration over the previous month was mainly driven by a slowdown in the industrial sector, which moderated from a 4.4% year-on-year expansion in March to a 1.4% increase amid disruptions to the supply chain stemming from the Japanese earthquake. In addition, output in the agricultural sector dropped 1.2% (March: +5.0% yoy). Meanwhile, the services sector maintained its momentum and expanded 3.1%, which mirrored the print tallied in March. A month-on-month analysis does not corroborate the slowdown suggested by the annual figures, as economic activity grew a seasonally adjusted 0.35% over the previous month (March: -0.22% mom) driven by stronger growth in the services sector.