Mexico: Some encouraging signs from manufacturing production - Wells Fargo

According to analysts from Wells Fargo, the Mexican manufacturing sectors regained some strength, giving an encouraging sign.

Key Quotes:

“The all-important Mexican manufacturing sector strengthened in February,posting a growth rate of 0.5 percent after declining 0.1 percent in January. The Mexican manufacturing index tends to track movements in the manufacturing sector in the United States and in some of the larger manufacturing countries across the global landscape. Although it is too early to conclude that we are close to a revival of manufacturing production, the recent improvement, while weak, is an encouraging sign.”

“Still, we are not ready to upgrade our Mexican economic forecast as we continue to believe that economic activity will remain constrained this year as well. However, further improvements in the industrial sector, but fundamentally in the manufacturing sector, could help reverse negative expectations on the overall performance of the Mexican economy this year.”

“Meanwhile, the Mexican peso, which was one of the weakest performing currencies in the world earlier this year, has recovered somewhat in what could be the first indication that markets overreacted to the slowdown in Mexican economic activity.”