April industrial production growth (1.1% yoy and -0.1% mom on a seasonally-adjusted basis) suggests overall growth slipped further in April to 2.1% yoy. The economy likely grew nearly 0.7% mom and, assuming some acceleration over next couple of months on improving US demand growth, appears set to grow close to our Q2 growth expectation of 3.5% qoq (annualized rate), according to Societe Generale.
Lower industrial production growth in April was largely expected and came despite the improvement in manufacturing production as the mining sector contracted most severely.
Over the past three quarters (excluding Q1), the economy has been growing near its trend, which seems to have moved to between 2.4% and 2.7%, estimates SocGen. Exports and investment remain crucial to manufacturing growth and the near-term growth acceleration.
With the US economy seen bouncing back in Q2 (albeit less than initially projected), a tradeled growth acceleration is expected in Mexico, adds SocGen. While export-led investment demand has supported growth, low consumption growth has prevented a sharper acceleration in overall activities. A stronger contribution to growth from consumption will have to wait until H2 15 or beyond.
