Mexican economy stagnates amid a global economic slowdown
November 6, 2019
The most recent official data shows that economic activity in Mexico has been stagnant in the past months of 2019. While the signs of deceleration manifested in internal items such as retail sales or the construction sector, during September, the weakness in the economy has extended to the export sector and, consequently, to the industrial sector.
For September, the National Institute of Statistics and Geography (by its acronyms in Spanish INEGI), reports that manufacturing exports fell by 1.7% annually, where automotive exports fall by 4.55%, situation no seen since October 2016. The fall in Mexican foreign trade is aligned with a fall in the same month of 14.8% in imports of industrial inputs that performs the United States, which impacts the Mexican industry. In the same way, in that country private investment has slowed to a growth of only 1.6% in the third quarter of 2019.
The fall of the export sector is combined with low business confidence in sectors such as construction, manufacturing, commerce and services, initiated in most of them since mid this year. The above has been reflected in the investment, which as of July 2019 fell 4.61%. However, the public sector has not helped to reverse this fall, since public investment accumulates a decrease of 14.4% to September, affecting lower economic activity.
In Nuevo León, the activity shows a higher performance than the country, with an increase 2.3% per annum during the first half of the year. Job creation has been weak in the year, with just a rebound in September of more than 13 thousand jobs generated. Given this situation, CAINTRA maintains its 2% growth forecast for the state economy.
Although the economic situation is adverse to the international scene and the environment politically, the latest Doing Bussiness of the World Bank indicator shows a structural weakness in Mexico, indicating important obstacles for companies operating in the country. Therefore, it is necessary to work on those points that facilitate the production and investment in the country as a simplification in the procedures and regulations for companies, major financing and support for micro, small and medium companies, as well as energy supplies at competitive prices.
CAINTRA makes a called to the authorities to reactivate the country's economic activity through certification, investment and the ease of doing business.
CAINTRA NUEVO LEÓN