[Economics] Mexico's economy has less dynamic momentum: IMEF

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Although the trend of economic growth prevails, the dynamism of the trade and services sector has lost some strength, while the rebound in the manufacturing sector is insignificant, said the IMEF in its monthly report.

The IMEF Manufacturing and Non-Manufacturing indicators for April suggest that Mexico's economic activity has started the second quarter of the year with a slower pace than that registered during the first quarter.

Although the trend of economic growth prevails, the dynamism of the trade and services sector has lost some strength, while the rebound in the manufacturing sector is insignificant, said the IMEF in its monthly report.

The IMEF indicators for the first three months of 2023 were consistent with the economic growth indicated by the timely GDP indicator, which showed quarterly growth of 1.1 percent.

In fact, the economy recovered its dynamism in this first quarter of 2023 in relation to the end of 2022.

In line with the signs of the IMEF Indicators, the services sector was the one that will end with the greatest traction, growing 1.5% quarter over quarter, while industry did so at 0.7 percent.

"For now, the economy still maintains a growth trend, although the data for April from the IMEF indicators suggested that with a less dynamic impulse than the first quarter," added the IMEF.

On the one hand, the IMEF Manufacturing Indicator for April increased 1.0 point compared to the month of March, standing at 50.6 units. The trend-cycle series remained unchanged (50.5) and the Indicator adjusted by company size increased 1.2 points to settle at 51.7 units.

The signal is clear for the IMEF: the manufacturing industry has returned to a zone of expansion, although there are still not enough elements to indicate that growth is robust and persistent.

The IMEF Manufacturing indicator has been fluctuating for several months very close to the 50.0 level; that is, without a clear trend regarding the persistence of growth in the sector. For now, the IMEF Manufacturing Indicator began its expansion in the second quarter of 2023.

 

On the other hand, the IMEF Non-Manufacturing Indicator reached 1.3 points, standing at 52.2 units.

Despite the drop compared to March, the Indicator continues in the expansion zone, thus accumulating 15 consecutive months in this zone.

Similarly, the trend-cycle series and the indicator adjusted by company size fell by 0.2 and 2.7 points, registering 52.7 and 51.8 units, respectively.

Thus, the three indicators have remained in expansionary territory for 15, 27 and 20 months, which is consistent with continued growth in the services and trade sectors, and with the results of GDP.

“The slowdown in the Non-Manufacturing Indicator suggests that the service sector economy has lost a bit of momentum compared to the strong dynamism of the first quarter, which was reflected in the timely GDP data. However, the dynamism of the sector prevails”, interpreted the IMEF.

 

Link: https://www.eleconomista.com.mx/empresas/Economia-de-Mexico-tiene-impulso-menos-dinamico-IMEF-20230502-0055.html