Trade balance – External demand is gaining momentum

Economic Research
Mexico
Trade balance – External demand is
gaining momentum

Trade balance (August): US$ -1,123.1mn; Banorte-Ixe: US$ :-986.9mn;
consensus: US$ -600mn (range: US$ -1,521mn to US$ 170mn);
previous: US$ -979.9mn

Total exports increased 2.1yoy, while imports edged up 4.8%yoy

Manufacturing exports reached a 4.4%yoy expansion

In our view, this report continues to show that external demand is
gaining momentum
September 26, 2014
www.banorte.com
www.ixe.com.mx
@analisis_fundam
Alejandro Cervantes
Senior Economist, Mexico
alejandro.cervantes@banorte.com
Trade balance figures for August show a US$ 1,123.1mn deficit. This figure
was below consensus estimate of a US$ 600mn deficit, but similar to our US$
1,123.1mn deficit forecast. Year to date, the trade balance accumulates a deficit
amounting to US$ 2,352.2 million.
Total exports grew 2.1%yoy in August. Oil exports decreased 10.6% vs.
August 2013 while non-oil exports expanded 3.9%yoy. In particular,
manufacturing exports increased 4.4%yoy, on the back of an expansion of
11.8% in car-industry exports, while the rest of manufacturing exports increased
0.9%yoy in the period in question, as shown in the table below.
Meanwhile, total imports increased 4.8%yoy. Non-oil consumption imports associated with private spending-, expanded 5.9%yoy, while non-oil imports of
intermediate goods -used as inputs in the manufacturing sector-, increased
7.1%yoy in August. Finally, imports of capital goods fell 0.3%yoy during the
period in question.
Trade Balance in August
%yoy
Total exports
Oil
Crude oil
Other
Non-oil
Agriculture
Mining
Manufacturing
Car industry
Other
Total imports
Consumption
Oil
Non-oil
Intermediate imports
Oil
Non-oil
Capital goods
Aug-14
2.1
-10.6
-11.6
-4.1
3.9
7.0
-25.4
4.4
11.8
0.9
4.8
0.6
-11.9
5.9
6.3
-1.6
7.1
-0.3
Jul-14
4.5
-19.4
-19.9
-15.6
8.2
15.9
44.6
7.6
14.6
4.7
3.1
2.5
-7.3
6.5
3.1
-11.7
4.5
4.2
Jan-Aug,'14
4.0
-8.8
-10.5
1.7
5.9
7.4
15.0
5.7
10.6
3.6
3.4
-0.8
-12.6
4.7
4.7
2.8
4.9
0.2
Source: INEGI
1
Jan-Aug,'13
1.6
-6.8
-7.8
0.4
3.0
-0.8
-2.8
3.3
9.6
0.6
3.8
7.7
-5.8
15.5
3.2
12.2
2.4
3.0
Document for distribution among the
general public
In our view, this report continues to show that external demand is gaining
momentum. As we have argued throughout our publications, 2Q14 was the
turning point for economic activity on the back of a more dynamic external
demand coupled with an incipient pick up of private consumption. In this
context, the first figures associated with the Mexican manufacturing sector in
3Q14 suggest that the growth momentum of the external demand will continue
throughout the second half of 2014, which will have a positive impact on the
overall growth dynamics of the Mexican economy.
Disclaimer
The information contained in this document is illustrative and informative so it should not be considered as an advice and/or
recommendation of any kind. BANORTE is not part of any party or political trend.
2
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