Mexico’s industrial output growth to be stronger in 2016

In February, Mexico’s industrial output grew at the most rapid pace in 14 months. This was due to manufacturing growth accelerating at the fastest rate in eight months, while the rate of mining contraction slowed. Meanwhile, expansion in other sectors such as water, electricity, construction and gas was also strong as compared to the recent figures. Hence Mexico’s industrial production is expected to have slowed a bit in March.

Overall industrial output growth is likely to have decelerated by 2.2% y/y and 1% m/m in March, whereas it is expected to have grown 1.9% y/y in Q1, said Societe Generale in a research note. The first quarter growth is expected to be the strongest print since Q4 2014. This implies that industrial output might be more solid this year as compared to 2015 if growth in manufacturing does not deteriorate again.