Mexican industrial production returns to positive territory in May on strong growth in construction

Mexico’s industrial production returned to positive territory in May, driven by a solid performance in the construction sector. Mexico’s industrial production rose 0.1 percent in May after falling 0.2 percent in April.

The 2.1 percent sequential rise in construction activity drove the nation’s industrial production index into positive territory. This was the most solid sequential rise in construction output since January 2016. April’s construction figure was also upwardly revised 0.2 percent.

Meanwhile, the mining output also rose in the month by 0.2 percent and notched its first month-on-month rise since January 2017. Mining output was still down 8.3 percent year-on-year on a not seasonally adjusted basis. Public utilities output also rose in the month by 0.5 percent, but dropped 1.9 percent year-on-year.

Industrial production would have risen more in May had it not been for a 0.3 percent contraction in manufacturing output in the month. However, the automobile sector was not responsible for the softness in the manufacturing output. Automobile production, which is a vital component of overall manufacturing production, rose 0.4 percent. This tends to affirm other reports from the export side that point to a solid rise in Mexican automobile exports to the U.S. market, noted Wells Fargo in a research report.