Analysts at Natixis explain that the Mexican economic growth has been resilient and the service sector is the main reason on the supply-side and consumption from the demand standpoint.
“Despite the massive shock in confidence and MXN weakness, consumption patterns did not changed at all. The strength of the labor market is in our opinion a key driver of this performance. The unemployment rate is at a pre-crisis level which is below full employment. Beyond the labor market tightness, other factors such as higher remittances and credit growth also contributed to offset the negative impact of rising inflation.”
“The manufacturing sector also performed well. Exports continue to freely cross the border whereas protectionism fears have diminished. MXN weakness and higher US industrial output have encouraged exports. Manufacturing exports which are behind 90% of total exports rose sharply in both auto and non-auto sectors in Q1 2017. These are positive news given the large contraction of the mining output. The stronger than expected data let us to revise up to 2.0% from 1.2% our growth forecast for 2017.”