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The automotive industry was the engine of the mexican exports during July, since both shipments abroad from the extractive, agricultural and oil industries showed annual decreases, according to timely figures of the trade balance.
Data from Inegi show that in the seventh month the exports they grew 2.9 percent annually, their best data in two months, and totaled 47 thousand 550.4 million dollars.
The foreign sales of manufacturing industry advanced 6.8 percent annually, and within it stood out the automotive, with a rebound of 35.7 percent, the most pronounced advance in 6 months, with 15 thousand 951.4 million dollars, and represented 33.5 percent of total exports.
In contrast, shipments of the oil activity they fell 28.5 percent; those of the agricultural sector fell 6.0 percent and those of the extractive industry decreased 25.9 percent.
Delia Paredes Mier, economic analyst, highlighted that the automotive industry has had a good performance in the year and even in the accumulated January-July they show a growth in exports of 17.0 percent. “It is being a good year for this industry and it is what is helping exports to be maintained. This is very good news given that we were expecting a strong slowdown in the United States, especially in the manufacturing sector,” she said.
Previously, the Inegi had already given a sign of the optimal performance of exports from the automotive sector, since shipments abroad of light vehicles rebounded 31.2 percent annually in Julywhich was his best data in 10 months.
Marcos Arias, Monex analyst, said that “manufacturing exports seem to give elements to expect new upward surprises in growth during the second half of 2023, but at the same time the imports have remained stagnant for much of the year, especially the intermediate goods segment”.
Demand weakens
Imports plummeted 7.7 percent annually in Julyits steepest decline since October 2020, to total 48 thousand 431.6 million dollars.
Purchases abroad of consumer goods fell 9.1 percent annually and those of intermediate goods 10.4 percent, with which they added two and five months with negative data in a row.
However, imports of capital goods rebounded 23.3 percent annually in July, thus completing 29 months of double-digit growth.
“That capital then becomes production; It is to expand the production plant. Here we could be talking about nearshoring and the effects, this is all the machinery and equipment that is needed to be able to produce”, added Paredes Mier.
In the exchange of merchandise, Mexico resulted in a deficit of 881 million dollars. In the oil balance, the balance was in deficit for 1 thousand 298 million dollars, while the non-oil balance showed a surplus of 417 million.
“Regarding oil flows, exports were impacted by a fire on one of the Pemex platforms on the Campeche coast, limiting the volume,” according to Banorte analysts.
risks ahead
Looking ahead to the coming months, Banorte analysts pointed out that various factors could play against the export sector and those with the greatest impact would be the weak global demandwith Chinese and the eurozone with a clear downward trend, at the time of a stagnation in the manufactures Americans.
“(Also) price effects, with greater pressures in some commoditiesmore adverse weather conditions due to the presence of the ‘El Niño’ phenomenon and new Russian attacks on grain silos in Ukrainian ports”, they specified.
However, they pointed out that the resilience of activity in the US and the strength of the automotive sector will continue to promote exportswhile imports will be supported by the domestic demand.
Banco Base analysts revised downward their forecast for exports this year to 4.5 percent, “although the manufacturing continue to grow at the expected rate, the oil companies show a significant drop. Inside, the forecast of Annual growth of 6 percent for manufacturing exports due to the boost of exports from the automotive sector”.
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