Mexico: Economy contracts for third quarter running in Q4 2019
A comprehensive GDP estimate released by the Statistical Institute (INEGI) on 25 February showed that output fell 0.5% on an annual basis in the final quarter of 2019, more sharply than the 0.3% drop reported in the preliminary estimate and marking the third consecutive quarter of decline (Q3 2019: -0.3% year-on-year). On a seasonally-adjusted, quarter-on-quarter basis, output slipped 0.1% in Q4, revised down from flat growth reported in the flash estimate and matching the third quarter’s outturn. For the year as a whole, GDP shrank 0.1%, contrasting 2018’s 2.1% expansion and marking the first slump since 2009 when the global economic crisis hit.
The steeper contraction in Q4 was primarily driven by a weaker secondary sector. Industrial sector output tumbled 2.1% on an annual basis, dragged down by a marked decline in manufacturing production as the strike at General Motors in the U.S. took a toll on the transport equipment segment, as well by the still-reeling construction sub-sector. On a somewhat more positive note, although mining activity continued to shrink, the pace of contraction eased notably in Q4 on weaker oil output losses. Meanwhile, services sector activity—the economy’s growth engine—flatlined in the quarter, following a marginal 0.1% expansion in Q3. Lastly, primary sector activity growth cooled to 1.6% year-on-year, down from the third quarter’s strong 5.4% increase which had marked a five-year high.