#INEGI: #CONSTRUCTION: Industry headcount +4.2% in Dec on m/m seas adj annual basis; FY2010 construction spending -0.6% in real terms

#INEGI: #CONSTRUCTION: Petroleum/petrochem +42.3% in Dec on m/m seas adj annual basis; FY2010 construction spending +32.1% in real terms

#INEGI: #CONSTRUCTION: Transpo infrastructure -28.2% in Dec on m/m seas adj annual basis; FY2010 construction spending +20.9% in real terms

#INEGI: #CONSTRUCTION: Power/communication +7.5% in Dec on m/m seas adj annual basis; FY2010 construction spending +10.4% in real terms

#INEGI: #CONSTRUCTION: Water/sewage +43.6% in Dec on m/m seas adj annual basis; FY2010 construction spending +3.5% in real terms

#INEGI: #CONSTRUCTION: Building value -11.4% in Dec on m/m seas adj annual basis; FY2010 building construction spending -7.9% in real terms

#INEGI: #CONSTRUCTION: TOTAL value +4.9% in Dec on m/m seas adj annual basis; FY2010 construction spending +5.6% in real terms

Front Page Milenio: Cardenas Wrong To Propose AMLO To Head PRD: Ortega - National head of PRD rejected handing post to AMLO to solve crisis

Front Page Universal: States' Debt Alarming - Loads carried by both states and municipalities creating hazards, 2 states already under water

Front Page Excelsior: Jesus Ortega Says AMLO A Dictator - PRD crisis grows as PRD President Ortega attacks former presidential candidate

Front Page Financiero: Inflation Expectations Could Be Contaiminated: Carstens - Central banker says recent crop losses could affect prices

Front Page Economista: High Oil Prices Hurting Finances - M. East Crisis forcing higher costs to import gasoline, other refined products

Front Page Reforma: Education Funds Used As Petty Cash - Though illegal, states use monies for food, festivals, air travel, furniture, more

SECURITY: National Human Rights Commission says at least 11,333 migrants kidnapped Apr-Sep '10: Honduras 42%, El Salv 16%, Guat 11%, Cuba 5%

#INEGI: Retail Index +8.5% in real terms in Dec to 118.90 v. 118.1 in Nov on m/m seas adj annualized basis; highest level since Aug 2008

#INEGI: Retail: Retail sales +2.4% in real terms in 2010 v. 2009; retail jobs +0.7% same period; wholesale sales +3.2%; employment +0.6%

Front Page Milenio: Halt Consultation, AMLO Supporters Say - PRD factions backing AMLO protest Ebrard's proposal to hold primary for Edomex

Front Page Universal: PGR Will Investigate Grievances - Congressional auditor says Attorney General's Office must act on its findings

Front Page Excelsior: Suicides On Rise From School Bullying - Every 48hrs in Fed District a complaint is filed against bullying

Front Page Financiero: Mexico Motor Lacks Internal Combustion - GDP seen moderate, domestic demand seen slack

Front Page Economista: FinMin Generalizes Digital Payments - Quarter million taxpayers now e-file thanks to regulatory, tech improvements

Front Page Economista: FinMin Generalizes Digital Payments - Quarter million taxpayers now e-file thanks to regulatory, tech improvements

Front Page Reforma: Electoral Judges Highly Paid, Perform Poorly - Only 43% of 2010 cases resolved; each judgment costs nation US$150k

Front Page Jornada: Tortilla Prices Up - 1 kilo selling for 10 pesos or more, prices rise at least 2 pesos over past week amid corn shortage

Front Page Milenio: 4 States Get Grenades - Police in 4 states authorized to carry frag grenades in order to combat well-armed narco cartels

Front Page Universal: AMLO Breaks w/PRD - Former prez candidate Lopez Obrador abandons party in protest of State of Mexico alliance w/PAN

Front Page Excelsior: AMLO Leaves PRD - Former prez candidate Lopez Obrador announces temporary leave, angered by PAN electoral coalitions

Front Page Financiero: Advertising War - Media conglomerate Televisa says sales to fall 4% after Telmex, Telcel pull ads amid price dispute

Front Page Economista: Fructose Embitters Sugar Industry - Cane growers say HFCS imports have displaced equivalent of 10 sugar mills

Front Page Reforma: Pemex Fatter - 2008 Energy Reform has generated higher headcount, lower crude oil production

#INEGI: Monthly GPD proxy IGAE +0.8% on m/m seas adj annualized basis to 118.98 in Dec v. 118.91 in Nov; +10.2% in Nov, +2.1% in Oct

#INEGI: Mexico GDP +5.5% in real terms in FY10; Q410 +5.1% seas adj, annualized from the previous three months v. +3.2% rate in Q310

#ECONOMY: Mexico GDP up 5.5% in 2010: *http://latinintel.blogspot.com/2011/02/mexico-gdp-55-in-2010.html*

Mexico GDP +5.5% in 2010

The numbers are in, and they show that Mexico's GDP rebounded at a stronger-than-expected pace in 2010, surging by 5.5% in real terms, according to a report last week from the National Statistics Institute (INEGI). One year ago, a central bank survey rendered an average forecast of 3.9%, so the surprise has come on the upside. But even with that bang-up performance, the Mexican economy remains smaller today than before the Great Recession.

At this point, INEGI has only released GDP data in constant terms, so we won't know the gross domestic product in dollar terms (or, for the matter, in current peso terms), until additional information is published this week. But suffice it to say that according to the World Bank, Mexican economic output totaled $1.1 trillion in 2008, before a staggering recession knocked it back down to $875 billion. Heavily dependent on the U.S. consumer, and the U.S. automotive sector in particular, Mexico was one of the hardest hit economies on the planet in 2009, contracting by a wrenching 6.1% rate. (The larger 20% magnitude of the dollar-based plunge in the size of total GDP reflects this 6.1% drop combined with the steep depreciation of the peso exchange rate in 2009.)

Incidentally, prior to the Great Recession, Mexico was one of 14 national economies ranking in the $1-trillion GDP club. Once current price data are published this week, they will almost certainly show it regaining that status. The peso is now stronger than it was at the end of 2008, and the 2010 GDP rebound brought the size of the economy almost back to pre-recession levels (0.9% lower).

Private consumption powers the overall Mexican economy. Roughly speaking, services accounts for just under two-thirds of output, industry a little more than one-third, and agriculture picks up the 3.6% slack between the two. The services sector grew by 5.0% after shrinking 5.3% in 2009.

Within services, retail dominates. A consumer recovery sparked a roaring 13.3% retail rebound in 2010. Other services, such as real estate, banking, media, and so forth, all performed much more modestly. Besides retail, only mass media and transportation services outperformed the headline growth rate of 5.5%. Two industries, health services and profession and scientific services, actually continued to decline.

The export-linked manufacturing industries merit special mention in any discussion of the Mexican economy. Though the industrial sectors as a whole account for about one-third of GDP, as noted above, the manufacturing industry dominates. The factory economy generated one-fifth of the value of GDP – contributing more even than retail. It took a beating in the past couple of years. Not only did the Great Recession let the air out of U.S. demand for Mexican-made goods, the U.S. automotive market plunged off a cliff. Mexico is now the largest foreign supplier of automobiles to its northern neighbor, having just surpassed Japan. As a result, in 2009 industry collapsed by 7.4%, a titanic calamity that forced hundreds of plants to close and tens of thousands of workers to lose their jobs. In 2010, though, the automotive industry pulled a dramatic turnaround of the kind only Hollywood stunt drivers seem to pull off: It fully doubled output. In turn, manufacturing boomed back by 9.9%.

Finally, the relatively small agriculture sector reaped a healthy 5.7% in output, versus a 2.0% decline in 2009. Farming has its own special set of problems in Mexico. The country achieved record exports of $18.5 billion in 2010 – surpassing tourism as a source of foreign currency revenue. Nearly a tenth came from tomatoes alone. Half a billion dollars came from cattle exports. This is how it works: Mexico imports billions of dollars per year in grain to feed livestock, exports them alive and in one piece, and then buys back billions of dollars of processed meat from abroad. Meanwhile, the corn-dependent population is teetering on the verge of its second tortilla crisis in less than a decade thanks to a week of freezing weather. But that's fodder for a future column.

Returning to the macro picture, results from the fourth quarter pointed to a favorable direction for future growth. In the October-to-December period, GDP expanded by 5.1% in seasonally adjusted, annualized real terms from the previous three months. That outstripped the 3.2% rate of the third quarter. Monthly data showed some slowing in December, but the overall momentum looks strong: The Bank of Mexico last week upped its estimate for 2011 economic growth to expand by between 3.8% and 4.8% this year from 2010, compared with a previous forecast range of 3.2% to 4.2%.

Front Page Universal: US, Mexico Create Bilateral Task Force To Investigate Attack On ICE Agents

Front Page Excelsior: Foreign Investors Demand Security - Top transnationals tell Calderon money on hold while crime wave continues

Front Page Financiero: Gasoline Imports Up 10x - Lack of new refineries in 30yrs has led to 10x growth in gasoline imports during past 10yrs

Front Page Economista: PRI Torn On Fiscal Reform - Internal discord on bill to lower VAT from 16% to 12%, but extend to foods and medicines

Front Page Reforma: Maize Supply Worrisome - Producers estimate imports will triple to 1.7mln metric tons of white corn v. 505k in 2010

#BANXICO: % of companies receiving bank loan in Q410 33.9% v. 29.3% in Q310 and 28.9% in Q409; 75.7% of firms say loans for working capital

Front Page Milenio: Chamber of Deputies Define Human Trafficking As Kidnapping - With legal change, becomes a felony with pre-trial prison

Front Page Universal: France Violated Cultural Accord - Sarkozy named Year of Mexico in honor of convicted kidnapper, French national Cassez

Front Page Financiero: Extend Education Tax Break: Experts: Deductibility of private school tuition should extend to alternative minimum tax

Top Story Economista: 9% of Expenditure Goes To Education - Mexican families spend 9% of disposable income on education; lowest 10th only 5%

Front Page Reforma: US Agent Killed In SLP - Armed assailants killed 1, injured 1 ICE agents on DF-MTY hwy outside of San Luis Potosi

#BANXICO: Foreign reserves fall US$20mln to US$118.529bln from Feb 8-11; monetary base +9.9% to MXN647.073bln; Banxico says demand 'normal'

Front Page Jornada: Mexican Poverty Equal To Zambia In Some Areas - Poorest municipalities also register severe abuse against women

Front Page Milenio: Obama Seeks $335mln for Mexico Aid - White House budget draft seeks $282mln for Merida Initiative and $9mln for border

Front Page Universal: Miracle Products Banned - Govt bans 13 widely advertised untested medical products promising cures for diabetes to HIV

Front Page Excelsior: Diplomatic Crisis - Mexico withdraws from "Year of Mexico" in France amid dispute over convicted kidnapper Cassez

Front Page Financiero: Oil Prices Rising - Brent futures at US$104.30/bbl, highest in 28mos; Pemex crude at US$87.86/bbl v. US$72.33 in 2010

Front Page Economista: Deduction To Cost MXN13bln - Private school tuitions to be tax deductible, move aimed at middle-class families

Front Page Reforma: 4 Cartels Battle For Edomex - Zetas, La Familia, los Beltran Leyva and cells of La Barbie have led to 50+ '11 executions

Front Page Milenio: Gil Denies Calderon Rumors - President's personal assistant rejects speculation that Calderon is an alcoholic

Front Page Universal: Fepade Frets Over Cartels At Voting Booths - Election crime agency laying plans to protect presidential vote in 2012

Front Page Financiero: Inflation Slows - Annualized price index falls to 3.78% in Jan despite rise in foods; dn from 4.40% rate in December

Front Page Economista: FinMin Wants Money Laundering Oversight - Tug-of-war with Fed Police for policing authority as Congress debates bill

Front Page Reforma: Weather Pressures Tortilla Prices - Record lows in north have hurt maize output, prices of tortillas seen heading higher

#INEGI: #GrossFixedInvestment: Headline trendline +1.4% annualized in Nov10 v. +5.9% in Oct10; still trending up, but pace slowing since Aug

#INEGI: #GrossFixedInvestment: Headline Index -4.2% seas adj annualized in Nov10 v. +3.0% in Oct10; still down 10% from 2008 historical high

#INEGI: #GrossFixedInvestment: Machinery & Equipment sub-index -3.6% seas adj annualized in Nov10 v. +10.4% in Oct10; snaps 4mos of gains

#INEGI: #GrossFixedInvestment: Domestic M&E sub-index -32.7% seas adj annualized in Nov10 v. +16.6% in Oct10; snaps 3mos consecutive gains

#INEGI: #GrossFixedInvestment: Imported M&E sub-index +10.3% seas adj annualized in Nov10 v. +6.9% in Oct10; 5th consecutive rise

#INEGI: #GrossFixedInvestment: Construction sub-index +3.8% seas adj annualized in Nov10 v. +3.4% in Oct10; 5th consecutive rise

Front Page Universal: Congress Calls For Business Lobby - PRI, PAN, PRD tout security legislation, tell private sector to pressure Los Pinos

Front Page Excelsior: Cartels Traffic Even In Precious Stones - Mexican cartels push into diamonds, gold, oil, archaeological treasures

Front Page Financiero: PAN To Go It Alone In 2012 - PAN backs electoral alliances for states, but presidential run will be single ticket

Front Page Economista: Housing Attracts Investors - Foreign capital returns to sector; Baja California a regional magnet

Front Page Reforma: Mining Spurs Foreign Exchange - Sector now 2.5% of GDP; has surpassed tourism and migrant remittances for capital inflow

SURVEY: Nat'l poll by El Universal/Buendia & Laredo finds public approval for Pres. Calderon at 52%, lowest in 2yrs; on decline since May10

Front Page Universal: Public Safety Reforms Urged - In open letter 50 citizen, biz orgs demand leg action amid fierce congressional gridlock

Front Page Guerrero: Paredes: We Did Not Lose In BCS, We Just Didn't Win - PRI Natl Pres Beatriz Paredes defends poor showing in BCS vote

Front Page Financiero: Banxico, Eye on Capital Flows - In first published minutes, central bank worries over flight of hot money

Front Page Economista: Spain Risk For Mexico? Moody's de Mexico says no, but World Bank points to country risk and Spanish bank ownership

Front Page Reforma: Anti-Pot Fight Wanes - While domestic consumption rises, destruction of marijuana fields has fallen under Calderon

#INEGI: Public Security Perceptions Index at 98.2 in Jan11 v. 96.2 in Dec12 and 100.5 in Jan10 (Apr09=100); hope rises for improving future

#INEGI: (New) Cyclic Indicators: Leading Index +0.18% m/m in Nov10 to 101.1 (100=long-term tendency), predicts continued near-term expansion

#INEGI: (New) Cyclic Indicators: Current Index +0.05% m/m in Nov10 to 100.3 (100=long-term tendency), continues expansion phase from Jun10

#INEGI: Consumer Confidence Index: Sub-indices on present economic household situation and big-ticket buys surge, future-looking ones drop

#INEGI: Consumer Confidence Index: Headline reading jumps 1.14% m/m in Jan11 on seas adj basis; stands at 91.4 (2003=100), 2nd highest in yr

#BANXICO: Central bank publishes mtg minutes for first time; shows vote to maintain 4.5% rate was unanimous; minority worried by core index

Front Page Universal: CFE Buys Power Instead Of Generating It - National utility CFE spent MXN30bln per year last decade for power from IPPs

Front Page Financiero: Congressional Session Explodes - Tense environment, parliamentary disagreements overflows, Thu session suspended

Front Page Economista: Labor Reform Ready - Leading business organization CCE says "consensus" bill to be presented Tue in Congress

Front Page Reforma: Egypt Spikes Petroleum Prices - Extra fiscal income from Arab crisis could reach MXN118bln, analysts say

#INEGI: Manufacturing Orders Index (IPM) up 0.44% in Jan11 to 53.6 from 53.1 in Dec10 on seas adj basis, points to near-term manuf growth

Front Page Financiero: Congress Without Agenda - After long hours of debate, parties fail to agree on even an outline for spring legislature

Front Page Universal: Sedena Seeks Larger Airforce - Defense Min seeking 5 Hercules H planes, Navy Min requesting 6 cargo planes, 6 choppers

Front Page Universal: Crisis Freezes 50% Of Afores - Half of individual social security accounts have not received fresh funds in past 36mo

Front Page Financiero: Violence, Inflation Loom - But analysts optimistic: central bank's Business Confidence Index at highest since Jul04

Front Page Economista: Upping Maize Production The Challenge - Govt estimates 4% increase this growing cycle, above pop. growth

Front Page Reforma: Metropolises Terrorized - Monterrey, Guadalajara suffered attacks by cartels; employers says violence intolerable

#BANXICO: #ForeignReserves +US$894mln from Jan 24-28 to total US$118.459bln

#BANXICO: Private economist survey: 2011 yearend peso seen at 12.32/US$ (48hr sell) v. 12.53 in Jan survey; 2012 peso seen at 12.53 v. 12.75

#BANXICO: Private economist survey: 2011 28-day Cetes year-end interest rates seen at 4.62% v. 4.70% in Jan survey

#BANXICO: Private economist survey: 2011 private consumption seen at 3.7% v. 3.8% in Jan survey; private investment seen at 5.3% v. 4.3%

#BANXICO: Private economist survey: 2011 consumer inflation seen at 3.91 v. 3.82% in Jan survey; 2011 core inflation seen at 3.67% v. 3.64%

#BANXICO: Private economist survey: 2010 GDP seen at 5.2% v. 5.1% in Jan survey; 2011 GDP seen at 3.9% v. 3.5% in Jan survey

Front Page Milenio: Bombs Lobbed At Checkpoint -For 2nd time in 1 week, explosive tossed at security traffic stop in Monterrey by #Narco

Front Page Universal: OECD Urges Mex To Accelerate Education Reform - At current rate, country will take 50yrs to reach "high achievement"

Front Page Economista: Mexico Drinks Less Milk -From '00 to '09 production only +14%, consumes 124lt per cap v. 188lt recommended by FAO

Front Page Reforma: IFE Invents Savings: Federal Electoral Institute won't return MXN350mln unused 2010 funds to Treasury, creates new trust