Standstill in industrial production

Industrial production

in the country had little actual variance in March when compared to numbers from February, according to the figures adjusted for seasonality of the National Institute of Statistics and Geography (INEGI).

The mining industry reduced its production in 1.5% at a monthly rate due to a downturn of 6.9% in the services related to this industry, while oil and gas extraction fell 1.5% in March when compared to February data.

The sector of generation, transmission, and distribution of electric power , and water and gas supply through pipelines to end consumers also saw its sharpest plunge since 2002, with a drop of 4.3% given the fall by 5.7% in electric energy distribution.

The construction industry fell 0.7% at a monthly rate, arising from the 3.2% slowdown in construction projects. Specifically, civil engineering projects fell 1.7% while specialized projects recovered by 4% – their highest rate in the last six months.

Overall, the manufacturing industry rose 2.1%. The sectors with the highest increase were the fabrication of oil derivatives (13%), metal industries (8.3%) and furniture production (5.6%).

“Most likely, uncertainty regarding the elections will be reflected in a depreciation of the Mexican currency during the second quarter of the year. This could imply a greater foreign demand of national products, which would have a positive impact on exports and manufacturing,” said Francisco Flores, economist at Banorte-Ixe.

Regarding the construction industry, Flores expects a “greater dynamism” due to greater government expenditure at a local level, because of the 2018 General Election. This would, in turn, “reflect in a growth in infrastructure projects.”

am