Industry catches breath in April

Industrial activity in Mexico advanced 0.6% in April compared to March and had two months of moderate progress, according to figures released last Friday by the National Institute of Geography and Statistics (Inegi).

The indicator reflected the advance in its four components, mining being the most dynamic, with an advance of 1.4 percent. It was followed by manufacturing -the largest component-, with an expansion of 1.2%; construction (+0.5%) and public services (electricity, gas and water, +0.2 percent).

The improvement in industrial activity came close to overcoming the 1.1% drop it showed in February, so the January record continues to be the highest observed after the acute phase of the crisis caused by Covid-19.

However, the growth in March and April occurred amidst the complexity due to the shock in the supply of supplies due to the war in Ukraine and logistical complications due to the impact of Covid-19 in China, which forced the closure of several ports in that country. country.

“The recovery so far this year has been 1.2 percent. In our opinion, this is very positive considering that at a global level the industry continues to face problems in the production chains – with delays in the times to fill orders, scarcity and higher price of inputs, increases in freight rates and closure of ports, among others”, said Juan Carlos Alderete, director of Economic Analysis of Grupo Financiero Banorte.

From January to April, industrial activity shows a year-on-year advance of 3%, with expansions in mining (+1.7%), public services (+2.3%), construction (+0.4%) and manufacturing (4.5 percent).

But if it is compared with the same period of 2019, prior to Covid-19, there is still a 2.2% decline in the general index, where the main delay is in the construction line (-16%), followed by of public services (-2.2 percent).

Meanwhile, mining has already grown 3.9% (although with a relatively easy comparison) and manufacturing has expanded 2.3%, but still with seven of its 21 branches of activity that have not managed to recover, such as textile manufacturing, from clothing and footwear, manufacturing of machinery and equipment, as well as transport equipment.

Going forward, the Mexican industry could still benefit from the gradual deconfinement of Chinese ports, but other challenges remain.

“We still anticipate that the demand for manufactured goods in Mexico will continue to be supported by the recovery in private consumption locally and in the United States, but this will moderate due to inflation and monetary tightening,” said Alejandro J. Saldaña, analyst of the B×+ Financial Group.

As of April, industrial activity shows an advance of 3%, with expansions in mining (+1.7%), public services (+2.3%), construction (+0.4%) and manufacturing (4.5 percent).

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