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UPDATE 3-Mexican factory exports hit record high in Dec, imports dip
January 25, 2013 / 2:56 PM / 5 years ago

UPDATE 3-Mexican factory exports hit record high in Dec, imports dip

* December manufactured exports rise 1.25 percent vs Nov

* 2012 sees first trade surplus in 15 years

* Imports ease points to weaker domestic demand

By Alexandra Alper

MEXICO CITY, Jan 25 (Reuters) - Mexican manufactured exports rose to an all time high in December on strong U.S demand, while imports dipped, helping Latin America’s no.2 economy notch its first annual trade surplus in 15 years.

Manufactured exports picked up 1.25 percent last month from November to a record $26.1 billion, the national statistics agency said on Friday.

Lower imports were a sign of flagging domestic demand, with non-oil imports down 1.29 percent in the month.

“It’s a mixed signal,” said Marco Oviedo, an economist at Barclays Capital in Mexico City. Despite the dip in imports, export strength “shows that perhaps the slowdown that came from outside, principally from the U.S., ended, at least, in December.”

Demand for Mexican-made cars and TVs in the United States has helped bolster Latin America’s second-biggest economy amid a wider global slowdown, allowing the country to post an annual trade surplus of $163 million last year, its first since 1997.

“These figures attest to gains in external competitiveness achieved by Mexico in recent years,” Goldman Sachs economist Alberto Ramos said in a client note.

However, the central bank said last week it was concerned about slowing exports and local demand.

Mexico’s economic growth is seen slowing from an estimated 3.9 percent rate in 2012 to a 3.5 percent rate this year, a Reuters poll showed this week.

The December figures are “a surprise for the wrong reasons,” said Pedro Tuesta, an economist at 4cast in Washington, referring to the weaker than expected import data. “If it becomes a trend, it’s telling you that economic activity may start to soften.”

The import of non-oil goods used by factories to make other products fell only 0.08 percent, month-on-month, but imports of capital goods waned 5.38 percent.

Data released on Thursday showed annual inflation eased to the lowest level in more than a year in early January, nearing the central bank’s target and bolstering bets that the central bank will focus more closely on risks to growth.

Mexican auto exports and production hit an all-time in 2012, and the Mexican Auto Industry Association (AMIA) has predicted even stronger growth in both areas for 2013. .

December exports of autos declined 1.43 percent while non-auto manufactured goods rose 2.37 percent month-on-month. Roughly 80 percent of Mexico’s exports go to the United States.

Volkswagen on Friday announced it would begin assembling its “Golf” model in Mexico next year, in a further sign of growing automotive muscle in Latin America’s no. 2 economy.

Mexico posted a $552 million trade surplus in December, when adjusted for seasonal swings, and a non- seasonally adjusted trade surplus of $962 million.

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