'Vochol' unveiled: VW Bug adorned with traditional Huichol bead-work: http://ping.fm/HSsNH
Mexico Watch Intelligence Service
The leading intelligence blog for analysis on business, politics, finance, and the economy for Mexico. Thousands of diplomats, analysts, investors, government officials and top executives with responsibilities - direct or otherwise - relied upon the Mexico Watch Intelligence Service for nearly 20 years. Publication of that service was suspended in 2009, but this blog remains in publication and free to read. Contact us for information on our research and consulting services.
10 December 2010
ALERT: #Narco kingping, Nazario Moreno Gonzalez (aka El Chayo, el Doctor), head of La Familia Cartel, killed by security forces in Michoacan
#INEGI: #PublicSecurityPerceptionsIndex -6.3% annual in Nov, biggest drop coming in personal safety sentiment v. 1yr ago (-10%)
#INEGI: #PublicSecurityPerceptions: Stats agency releases new index on public safety; drops to 92.0 in Nov, lowest pt since Jan 09 start
Gross Fixed Investment
Inegi's Gross Fixed Investment index clicked ahead at a 6.71% annual rate in September (also up strong 1.22% seasonally adjusted monthly rate), but capital expenditure remains very sluggish overall. The GFI is up a mere 1.01% YTD and remains a savage -14.80% off historic levels achieved in October 2008, before recession set in.
Construction, the other major component of capital formation, is also struggling, essentially showing no YTD growth (+0.14%). Indices below are NOT seasonally adjusted. (2003=100)
2010 Gross Fixed Investment
Total Machinery & Equip. Domestic Imported Construction
Jan 121.9 133.2 112.5 145.2 116.1
Feb 116.2 118.5 101 128.6 115
Mar 133 139.8 111.2 156.3 129.4
Apr 122.2 126.6 106.7 138 120
May 130.4 133.4 105.7 149.3 128.8
Jun 130.8 139.1 110.2 155.7 126.5
Jul 131.9 140.5 120 152.3 127.4
Aug 133.6 149.4 117.2 167.9 125.4
Sep 133.6 152.5 122.7 169.6 123.9
#INEGI:#GrossFixedInvestment +6.71% var in Sep v year-ago mo.; YTD +1.03%; still -14.8% off historic peak in Oct 08 amid creeping recovery
Antitrust Reform: Mexico Senate votes down bill approved by lower house; PAN had criticized opposition as watering down president's proposal
09 December 2010
Chamber of Deputies approves Mexican constitutional amendment to make high school free and obligatory; to be phased in over next ten years
November Inflation Report
The headline consumer price index reached 4.32% in November as seasonal pressures continue to push toward a 2010 year-end 4.5% result.
The largest driver in the overall result was higher fresh farm prices. Lime prices, for example, shot up nearly 50% in November alone. Squash, peppers, and corn also weighed in.
In terms of underlying core inflation, the index also trended up at 3.63% versus 3.58% in October. The central bank said food items, notably milk and sugar, received steep discounts from retailers this time last year, and that was not repeated.
The table is as follows for annualized inflation indices through November 2010:
HEADLINE 4.32
*Core Sub-Index 3.63
*Merchandise (Core) 3.69
***Foods (Core) 3.8
***Other (Core) 3.59
**Services 3.58
***Housing (Services) 2.75
***Education (Services) 4.65
***Other (Services) 4.07
*Non-Core Sub-Index 6.2
**Administrated/Regulated 6.52
***Administrated 6.67
***Regulated 6.37
**Produce 5.59
***Fruits and Vegetables 10.15
***Meats and Eggs 2.64
#MexicanInflation: Underlying core inflation sub-index ticks up to 3.63% in Nov from 3.58% in Oct on food, says biweekly #Banxico report
#MexicanInflation: Headline inflation rises to 4.32% in Nov from 4.02% in Oct as produce prices spike, says biweekly #Banxico report
#MexicanInflation: Consumer price index rises to 4.32% in Nov from 4.02% in Oct as produce prices spike, says biweekly #Banxico report
08 December 2010
INEGI: #Mexico #DigitalTelevision ownership up 3.3% in 2010 to 13.2% of all homes; 81.5% still use only analog TVs, new #INEGI study reports
INEGI: #Mexico #computer ownership surged 13.2% in 2010 to 8.4mln homes, or 29.8% of total, new #INEGI study reports; 38.9mln total users
INEGI: #Mexico #Internet surged 20.6% in 2010 to 38.9mln Mexicans, new #INEGI study reports; 22.2% of homes are now connected, or 6.3mln
October Trade Report
EXPORTS
The Finance Ministry reported that October export activity totaled US$26.50bln on a non-seasonally-adjusted basis (note that Pings use seasonally adjusted data). The result represented a strong 19.8% increase from October 2009. Stripping out petroleum, exports rose EVEN FASTER at a 20.4% annual rate. Mexico's most important export category, manufacturing, posted shipments of US$21.97bln, a 20.4% increase. Crude oil sales of US$3.2bln represented a 19.95% growth from a year-ago.
IMPORTS
The Finance Ministry reported that October import activity totaled US$27.32bln on a non-seasonally-adjusted basis, a 24.9% rise over the same month in 2009. The largest component, intermediate goods for manufacture processing, jumped 20.3% to US$21.97bln.
BALANCE
A trade deficit of US$818mln in the month of October brought the accumulated 2010 gap to US$2.80bln. This favorable result was obtained in part by the slick sales of crude oil as the basked of Mexican crude oil hit US$74.30 in October. So far this year, Mexico has an accumulated trade surplus of US$8.61 in petroleum products -- even after the cost of importing refined gasoline from abroad. The non-petroleum segment of the economy, however, reports a deficit of US$11.40bln YTD through the end of October.
#TRADE: #MexicoImports reach US$25.95bln in Oct vs US$25.10bln in Sep on seasonally adjusted basis; increase of 3.35% month-to-month
#TRADE: #MexicoExports reach US$25.35bln in Oct vs US$25.00bln in Sep on seasonally adjusted basis; increase of 1.41% month-to-month
07 December 2010
BEVERAGES: Senate Health Committee passes bill that would ban sales of #EnergyDrinks to minors, restrict sales in bars and nightclubs
#CONSUMER DEMAND: Retailer Wal-Mart de Mexico (#Walmex) same-store sales +0.5% y/y in Nov, vs +4.2% in Oct, +3.1% YTD; economy is weakening
ANTITRUST: #Mexico Senate passes competition reform to provide sanctions of 10% of revenue, up to 10yrs prison for monopolistic activity
Vermont-based GS Precision to expand Sonora #manufacturing facility from 6k to 34ksqft; makes components and sub-assemblies for #aerospace
CONSTITUTIONAL AMENDMENT: Chamber of Dep. Constitutional Committee passes reform bill that would nix presidential veto power and pocket veto
#LABOR REFORM: PRI Deputy Pres. Francisco Rojas GutiƩrrez says PRI labor reform proposal approved by party, to be sent to Congress on Thu
CONSULTA MITOFSKY: Influential poll finds leading opposition party heavily favored to win presidency in 2012: PRI 40%, PAN 16%, PRD 11%
CONSULTA MITOFSKY: Influential poll finds leading opposition party heavily favored to win presidency in 2012: PRI 40%, PAN 16%, PRD 11%
06 December 2010
MANPOWER Employment Outlook Survey: Q111 +16% seas adj v. 17% in Q410, gains strongest in northeast (21%), lowest in Mex City valley (15%)
Kansas City Southern de Mexico (KCSM) will spend US$70mln in 2011 to build a rail terminal at its Lazaro Cardenas port operations
INEGI: Leading Economic Indicator
INEGI: Leading Economic Indicator 0.0% in Sep v. Aug seas adj, ending 3mos of declines but unable to reverse; reinforces signs of double-dip
The stats agency's Leading Index, designed to track the business cycle, was flat at 0.06% in September on a seasonally adjusted basis, reversing three months of negative numbers that were pointing toward a double-dip recession.
A composite score of 100.9 indicates that the economy will continue to expand above its long-term potential over the next few months, but with a likelihood of slipping into a decelerating trend.
The LI is composed of six sub-indices: manufacturing employment, non-petroleum exports, the Bolsa, the peso, interest rates, and the S&P 500.
INEGI: Current Economic Indicator
INEGI: Current Economic Indicator +0.06% in Sep v. Aug seas adj, rounding out signs of Q3 GDP growth; more than 1yr of gains, but pace slows
The stats agency's Current Index, designed to track the business cycle, rose 0.06% in September on a seasonally adjusted basis, the lowest rate of growth since recovery began in June 2009. It was less than one-third of the 0.19% rate of one-year ago.
A composite score of 102.1 indicates that the economy is expanding above its long-term potential.
The CI is composed of six sub-indices: IGAE, Industrial activity, retail sales, formal jobs, urban employment, and imports.