Gross Fixed Investment (GFI) grew 12.7% yoy in February (from 7.8% in January), above our forecast and market consensus (as per Bloomberg) – both at 9.1%. Adjusting the figures for working days, GFI grew at the same pace, taking the quarterly annual rate to 10.0% (from 7.9% in 4Q22). According to the calendar-adjusted breakdown, quarterly annual growth in construction investment stood at 4.6% in February (from 3.0% in 4Q22), while machinery & equipment investment stood at a strong 16.8% (from 14.1%).
At the margin, GFI expanded at a solid 1.9% mom/sa in February driven by machinery & equipment investment (2.9%), with a strong momentum. The quarter-over-quarter annualized growth rate (qoq/saar) stood at 18.8% in February (from 14.5% in 4Q22). Looking at the breakdown, construction investment qoq/saar stood at 17.0% in February (from 17.8% in 4Q22) driven mainly by non-residential construction investment, while machinery & equipment investment came in at solid 24.4% (from 8.4%).
Private consumption softened at the margin in February, but momentum remained solid. The monthly proxy for private consumption expanded by 3.6% yoy in February (using calendar-adjusted figures), with the quarterly annual growth rate at 4.7% in February (from 4.5% in 4Q22). At the margin, private consumption fell by 0.4% mom/sa in February (after growing a strong 1.8% and 1.4% in January and December, respectively), taking the qoq/saar figure to 7.8% in February (from 1.8% in 4Q22).
Our GDP growth forecast for this year of 1.8% has an upward bias given a better-than-expected evolution of activity in 1Q23.
Nevertheless, we expect activity cool down in the last three quarters of this year, slowed by a softer U.S. economy and a tight monetary policy stance.
Julio Ruiz