Mexico industrial production increased 0.2% m/m sa in Feb, owing to a strong decline in construction activities (-2.2%), partially compensated by a positive performance in manufacturing (1.0%) and mining (1.5), as oil production slightly recovered this month. In annual terms, IP increased 1.6%.
Barclays said - "This report confirms our belief of a very weak first quarter. We estimate that the GDP proxy (IGAE) for Feb will register a contraction of 0.2% m/m sa, setting our GDP tracker for Q1 15 at 0.1% q/q, a tad below our current forecast, but consistent with our 2.6% y/y GDP forecast for 2015 as a whole."
Construction continues to disappoint, this time driven by a 3.5% m/m sa contraction in edification works, partially compensated by a 1.5% increase in infrastructure. This sector might see moderate recovery, as public investment will likely decelerate this year.
"Overall, Banxico will likely be patient enough not to start raising rates any time soon." - notes Barclays
