Gross Fixed Investment (GFI) expanded at a strong 17.4% yoy in May (from 6.2% in April), above market consensus of 9.7% (as per Bloomberg). Adjusting the figures for working days, GFI grew at a slightly slower pace (15.5%), taking the quarterly annual rate to 10.8% (from 9.3% in 1Q23). According to the calendar-adjusted breakdown, quarterly annual growth in construction investment stood at 5.4% in May (from 3.1% in 1Q23), while machinery & equipment investment stood at a strong 17.2% (from 17.3%).
At the margin, GFI also expanded at a strong pace driven by construction investment. April’s GFI increased 4.5% mom/sa, with construction investment growing at strong 7.6%. The GFI quarter-over-quarter annualized growth rate (qoq/saar) stood at 14.6% in May (from 14.2% in 1Q23). Machinery & equipment investment GFI momentum remains strong (qoq/saar of 22.4% in May, from 27.9% in 1Q23), while construction investment qoq/saar improved to 6.9% (from 5.8%).
Private consumption momentum remains positive. The monthly proxy for private consumption expanded by 3.9% yoy in May (using calendar-adjusted figures), with the quarterly annual growth rate at 3.3% in May (from 4.5% in 1Q23). At the margin, private consumption weakened falling by 0.3% mom/sa, but with a still positive momentum (qoq/saar of 1.8%).
Activity indicators during the 1H23 remain favorable supported mainly by internal demand. Still, we expect weaker activity in 2H2023 and 2024 due to an expected slowdown in the U.S.