Mexico: Growth in remittances slows in October but overall level remains high
December 1, 2015
October represented another month of growth for Mexico’s remittances. However, the pace of expansion in transactions slowed sharply. Remittances totaled USD 2.1 billion in October, which was in line with market expectations. The result represented a 1.7% year-on-year increase and marked a notable slowdown compared to the 4.6% rise registered in the previous month.
Remittances from Mexicans abroad continue to be supported by the gradual improvement in the U.S. labor market, in particular in the construction sector. U.S payrolls in the construction sector, which is a proxy of hiring dynamics in the labor market with a high proportion of Mexican workers, jumped in November, increasing at the fastest rate since February.
The rolling 12-month sum of remittances totaled USD 24.7 billion in October, which represented a 6.4% increase over the same period last year. The increase followed the 6.9% expansion tallied in the 12 months up to September. As there is more evidence that the U.S. labor market is gradually improving, remittances are slowly approaching pre-crisis levels and the peak that occurred in 2007, when they totaled USD 26.1 billion.
Author: Ricardo Aceves, Senior Economist