Mexico: Economic activity recovers in August
Latest reading: Economic activity increased 0.6% in seasonally adjusted month-on-month terms in August, following a 0.9% drop in the previous month. This follows a recent pattern of choppy data from one month to the next; the last time the economy strung together two straight months of growth was in January–February.
Relative to the prior month’s data, readings in August improved for the services sector (+0.5% on a seasonally adjusted month-on-month basis vs -0.4% in July), the industrial sector (-0.3% vs -1.2% in July) and the primary sector (+14.5% vs -3.2% in July).
On a year-on-year basis, economic activity was down 0.9% in August, following a 1.1% fall in the previous month.
Panelist insight: On the outlook, Goldman Sachs’ Alberto Ramos said:
“Going forward, real activity is likely to face headwinds from domestic and external policy uncertainty, a negative fiscal impulse, and soft business confidence. On the positive side, household spending is likely to continue to benefit from still resilient credit flows and solid wage growth (including generous minimum wage increases). Public investment (public works) is expected to soften given the need for fiscal consolidation, and private investment to be impacted by both domestic and external uncertainty, in particular with regard to the US trade-policy (tariffs) and the outcome of the USMCA review.”