Reuters reported that Mexican industrial production rose less than expected in November 2011 in a sign that slow US growth could be weighing on Mexico's economy.
The national statistics agency said that industrial output in Latin America's second largest economy rose 0.1% in November 2011 from October 2011. Analysts had expected a 0.5% rise after a 0.5% slump in October 2011.
Mr Eduardo Gonzalez, an economist at Banamex in Mexico City, said that Mexico's economy should still manage to post growth of nearly 4% in 2011. He added that "Even though this missed expectations, it is still within a range where it should be, given the economic slowdown in Mexico. This is really not a bad data point, given what we have seen in the United States."
Sluggish activity in the United States, Mexico's top trading partner, is expected to weigh on Mexico's economy this year when growth is seen slowing to around 3.2%.
A separate report showed automobile production and exports rose in December, underscoring some strength in factory output.
Yields on Mexican interest rate swaps were little changed after the data. Some investors are betting on an interest rate hike in Mexico later this year from the current 4.5% benchmark rate.
A spike in annual inflation to a one year high in December stoked concerns that a weak peso could be feeding into higher consumer prices. But some economists think slowing US growth and a deepening crisis in Europe could push Mexico to cut rates.
Despite record automobile production, the index's dominant manufacturing component expanded a slight 0.07% in November 2011 as compared to October 2011. Mining rose 0.42%. Electricity, water and gas production fell 0.63% and construction dipped 0.01%.
Industrial output was 3.2% YoY higher, below the 3.4% increase expected by analysts and down from 3.3% rise in October 2011. Mexico's auto industry association, AMIA, said vehicle output rose by 5.0% in December versus a year ago. Automobile exports during the last month rose 16.1% compared to the same month last year.
(Sourced from www.reuters.com)
