The Economy of mexico has a “slight expansion”, concluded the Mexican Institute of Finance Executives (IMEF) when interpreting its two indicators on the state and direction of manufacturing production, consumption and services in the country.
The Manufacturing IMEF Indicator September recorded an increase of 0.6 points compared to August 2022, standing at 50.1 units, and marginally returning to the expansion zone.
The IMEF Indicator varies in an interval from 0 to 100 points and the level of 50 points represents the threshold between an expansion (greater than 50) and a contraction (less than 50) of economic activity.
For his part, the Non-Manufacturing IMEF Indicator decreased 0.6 points during the same period, standing at 50.9 units. However, it already has eight consecutive months above the threshold of 50.
Although the results of the month do not suggest an extremely vigorous dynamism of the economic activity, they do reveal a positive closing of the third quarter”, said the IMEF in its monthly report.
The results recorded for both indicators in the last three months anticipate the continuity of Mexico’s GDP growth, but with less dynamism in this second half of 2022 compared to the first semester.
In the United States, industrial activity showed a slight deceleration, passing its annual percentage change from 3.8% (in July) to 3.7 percent.
In particular, manufacturing production continued with an upward trend, although at a slower pace, since the monthly percentage change in August was 0.1% compared to 0.6% the previous month.
Meanwhile, the consumer confidencemeasured by the two most important indices, the one produced by the University of Michigan and the Conference Board, both showed an increase in September.
For its part, the labor market continued to show a solid evolution, despite the fact that the unemployment rate showed an increase in August to 3.7% from 3.5% in the previous month.
However, the IMEF’s Technical Advisory Committee considered that the solidity of the labor market is considered an argument to think that a possible recession in the United States would not be as deep or prolonged.
The inflation remained high in August, despite the fact that the general consumer price index fell from 9.1% at an annual rate in July, to 8.3% in August.
However, core inflation showed an increase at the annual rate from 5.9% in July to 6.3% in August.
In Mexico, the cyclical indicators coincident and leading up to July continued to show an opposite trend, since the coincident one continued to rise while the leading one showed a marked drop.
For the IMEF, the latter can be interpreted as the gestation of less favorable economic conditions in the future.
On the other hand, the behavior of IGAE As of July, it continued to show moderation, which was more marked in the component of industrial activity than in that of services.
Precisely the industrial production to July registered a deceleration, despite the fact that its trend continues moderately upward.
Gross fixed investment showed an increase in June (latest data available), although its growth rate continued to be very slow and the level of investment is still far from recovering pre-pandemic levels. Several foreign investments in plants and distribution centers in some states of the Republic such as Nuevo León and Querétaro stood out.
These developments are consistent with the international phenomenon of nearshoring. In the current global economic situation, said the IMEF, nearshoring is an excellent opportunity to be taken advantage of by the Mexican economy.
roberto.morales@eleconomista.
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