Mexico's manufacturing losing steam as US growth weakens

Trade data suggests that Mexico's industrial production growth fell further to 0.2% yoy in August as manufacturing growth slowed to 0.5% yoy. Meanwhile, the mining sector continues to be a significant drag to IP growth and construction sector growth has also slowed. 

The weakness in trade data is clearly due to weaker demand from the US, which appears to be slowing down in Q3. 

"In general, we remain optimistic about the shape of the US economy (assuming that the strengthening of the dollar will have only a temporary and minor impact on medium-term growth prospects)", says Societe Generale. 

This in turn also means that the current slowdown in activities in Mexico is unlikely to persist beyond one to two months. That said, the current weakness in IP could probably take away a couple of ticks from our 2015 growth forecast of 2.3%, added SocGen.