Mexican industrial production exceeded expectations in May, driven by a notable increase in construction activity, which made up for a decline in factory output compared to the previous month. The National Statistics Institute reported a 1% rise in industrial production on a seasonally adjusted basis, with construction experiencing a robust growth of 7.2%. Mining output also saw modest growth of 1.7%, while manufacturing declined by 1.4%. Output in electricity, water, and gas utilities increased by 1.8% from the previous month.
The surge in construction activity was primarily fueled by a significant 29.2% rise in infrastructure projects. However, lower output in industries such as food and beverages, textiles, refining, and machinery and equipment offset the positive gains. On the other hand, higher production in the electronics and auto sectors contributed positively to the overall industrial production numbers.
In unadjusted terms, industrial production witnessed a 3.9% increase from May 2022, while the growth rate for the first five months of this year stood at 2.4%.
Despite the recovery in Mexican industry following a dip in March, Capital Economics economist Jason Tuvey suggests that the country’s economy has struggled to maintain the momentum witnessed at the beginning of this year. He believes that tight fiscal and monetary policies, coupled with a potential recession in the United States, may cause growth in Mexico to slow down in the coming quarters.