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MEXICO – Soft industrial production momentum
09/06/2023 | Julio Ruiz

Industrial production (IP) grew 0.7% yoy in April (from 1.5% in March), below market expectations of 1.3% (as per Bloomberg). According to figures adjusted by working days, IP expanded at a faster pace (1.6%), taking the quarterly annual rate to 2.1% (from 2.3% in 1Q23). Looking at the breakdown, the quarterly annual rate for construction sector stood at 0.7% in April (from 2.0% in 1Q23), while manufacturing and mining sectors stood at 2.2% (from 2.4%) and 4.0% (from 1.7%), respectively.  



At the margin, industrial production expansion in April of 0.4% mom/sa was driven by a solid growth in manufacturing output of 2.1% despite a weaker external scenario.  Still, industrial production momentum is soft. The seasonally adjusted annualized quarter over quarter (qoq/saar) rate of industrial production stood at 1.0% in April (from 1.9% in 1Q23), with manufacturing output and construction sector at 1.4% (from 1.1%) and -4.3% (from 0.3%), respectively. 



Our GDP growth forecast for this year stands at 2.4%.  The strong sequential expansion in manufacturing output is unlikely to last given a weaker U.S. economy. We expect the economy to cool down in the last three quarters of this year, after solid GDP growth in 1Q23.