Economic activity in Mexico falls for the third consecutive time in 2019


The Global Economic Activity Indicator registered an annual decrease of 0.6% in July 2019. In its immediate comparison, it also fell, with a 0.1% lower level than the previous month. 

During July 2019, economic activity in Mexico registered its third fall so far this year. The contraction was 0.6% in annual comparison, result pressed by the negative behavior of the industries and weak advances in tertiary activities. The dynamism presented in the agricultural sector is not enough to lift the national economy. 

The Global Economic Activity Indicator (IGAE) registered a decrease also in its immediate comparison, only from June to July the national economy contracted 0.1 %, following data from the National Institute of Statistics and Geography ( Inegi ).

The IGAE, which provides an overview of the behavior of the Mexican economy in the short term, reflects that in 2019, productive activities as a whole have shown a deceleration trend. The growths presented have been modest, and there have been falls in March and May of 0.6 and 0.2% respectively.

The industry does not recover

The sector that exerts significant negative pressures on the national economy is that of secondary activities. During the seventh month of the year, production in this sector fell 2.8% in its annual comparison, linking nine consecutive months in the negative field. Especially due to the recession within the construction and mining industries.

During July of this year, the contraction of the activity of the construction companies deepened to 9.1% at an annual rate, being the sector with the worst performance and linking six falls in line.

Then there was a 7.4% drop in national mining activity, a sector that has not managed to get out of the red numbers since 2013.

For its part, the electricity generation, transmission and distribution industry, and water and gas supply also showed negative results. After four months with growth in July, its economic activity fell 1.1% at an annual rate. 

The only item that registered an economic expansion in this period was that of manufacturing industries, with an annual increase of 1.2% in its economic activity relaxed the fall of the industrial sector.

Services and commerce, weak

On the other hand, the economic activity of the most important sectors of the national economy, services, and commerce remain stagnant with modest growth.

In this seventh month, the economic expansion in these areas was only 0.2% in annual relation. The behavior of this sector limits, to a large extent, the national economic growth because it concentrates about 65% of all Mexican production.

The low dynamism within this category of the economy is explained by the falls in three of its nine subsectors. The most pronounced was presented in the services related to legislative, governmental and justice delivery activities (3.6%), then the decrease was found in the wholesale trade (1.6%) and in the educational, health and social assistance services ( 0.24 percent). 

In counterpart, some subsectors showed slight progress. The most dynamic was that of professional, scientific, technical and business support services that increased their economic activity by 3.4% annually; It was followed by retail trade (1.9%), entertainment, culture and sports services (1.3%), financial and real estate services (0.4%) and tourism and transportation-related services (0.3 percent). 

Source: el economista

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