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 Business News | January 2007 
Construction Spurs Strong Output Growth In November
 El Universal
Mexico´s industrial production rose more than expected in November, buoyed by a surge in building and construction.
Industrial output increased 4.8 percent in November from a year earlier after growing a revised 4.5 percent in October and 5.1 percent in September. Economists expected output to rise 3.8 percent, according to the median of 13 estimates in a Bloomberg survey.
Faster-than-expected growth in industrial production shows Mexico is better prepared to withstand the effects of a U.S. slowdown than in the previous decade. The U.S. buys about 80 percent of Mexico´s exports.
"Overall Mexico´s economy is in good shape and this number confirms it," Aryam Vazquez, an economist with Informa Global Markets in New York, said in a telephone interview. "There are signs that Mexico is a lot better prepared than in the 1990s to weather a slowdown in the U.S."
Mexico´s industrial production in November rose 0.87 percent from the previous month on a seasonally adjusted basis.
Mexico´s manufacturing sector grew 4.6 percent in November from a year ago. Construction activity rose 6.3 percent, the government said.
Better-than-expected economic growth, coupled with inflation that remains above the central bank´s target range, could lead policy makers to raise rather than cut rates this year, Juan Treviño, an HSBC Holdings Plc economist in Mexico City, said in an earlier telephone interview.
"In the next few months the central bank could even raise rates as a preventative measure so that the rising costs of corn and tortillas don´t contaminate other prices," Treviño said.
Surging cost of food products led consumer prices to rise 4.05 percent in 2006, above the central bank´s 2 percent to 4 percent target range. Mexico´s central bankers held the benchmark lending rate at a two-year low of 7 percent for an eighth month in December.
Central Bank Governor Guillermo Ortiz has vowed to remain "vigilant" to ensure rising inflation does not fuel consumer-price increases in 2007.
Alfredo Thorne, an economist at JPMorgan Chase & Co. in Mexico City, predicted in a report today that Banco de Mexico would raise its overnight lending rate by 25 basis points, or 0.25 percentage point, in February. |
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