12 Feb 2016
Mexican economic growth to remain under pressure - Wells Fargo
According to analysts from Wells Fargo, Mexican industrial production ended 2015 very weak and the economy is likely to remain under pressure.
Key Quotes:
“Confirming what had been clear earlier in the year, Mexican industrial production ended 2015 very weak, fundamentally driven down by a dismal performance by the mining sector during the whole of 2015 and a very weak construction sector during the last quarter of the year. Industrial production dropped 0.1 percent in December compared to the previous month and ended the whole year up only 1.0 percent, down from a growth rate of 2.6 percent during the whole of 2014.”
“The prospects for the industrial sector will remain under pressure for this year as well, particularly as the mining sector continues to face severe headwinds. The manufacturing sector will remain positive as long as demand for automobiles from the United States remains strong. However, the weakening of the construction sector, if sustained, could weaken the industrial production index further this year.
“This does not bode well for the Mexican economy in 2016. The Mexican fiscal sector is already facing severe headwinds from the hit from lower petroleum prices and production. Thus, expect Mexican economic growth to remain under pressure this year from a very weak industrial sector and an extremely contractionary fiscal policy.”
Key Quotes:
“Confirming what had been clear earlier in the year, Mexican industrial production ended 2015 very weak, fundamentally driven down by a dismal performance by the mining sector during the whole of 2015 and a very weak construction sector during the last quarter of the year. Industrial production dropped 0.1 percent in December compared to the previous month and ended the whole year up only 1.0 percent, down from a growth rate of 2.6 percent during the whole of 2014.”
“The prospects for the industrial sector will remain under pressure for this year as well, particularly as the mining sector continues to face severe headwinds. The manufacturing sector will remain positive as long as demand for automobiles from the United States remains strong. However, the weakening of the construction sector, if sustained, could weaken the industrial production index further this year.
“This does not bode well for the Mexican economy in 2016. The Mexican fiscal sector is already facing severe headwinds from the hit from lower petroleum prices and production. Thus, expect Mexican economic growth to remain under pressure this year from a very weak industrial sector and an extremely contractionary fiscal policy.”