(Adds economic growth context, details, comments from analysts)
By Daina Beth Solomon
MEXICO CITY, Sept 11 (Reuters) - Mexican industrial output slipped 0.4% in July from the previous month, data from the national statistics agency showed on Wednesday, a weak start to the third quarter after Mexico narrowly avoided recession in the first half of the year.
Mexico’s economy has been sluggish, with no growth in the second quarter after a contraction at the start of the year.
The industrial output in seasonally adjusted terms from June to July was hit especially by declines of 2.9% in mining and 1.4% in construction. Energy generation, transmission and distribution fell 0.7%.
Manufacturing was the only bright spot, growing 0.2%.
Year-on-year, industrial activity in July dropped 2.8% in seasonally-adjusted terms and contracted 1.7% in non-seasonally adjusted terms. It was the ninth consecutive annual decline for both measures.
“We suspect that Mexican industry will remain subdued over the coming months,” said a Capital Economics report, adding that the lackluster activity suggested Mexico’s central bank may cut interest rates later this month.
Goldman Sachs analyst Alberto Ramos said factors including political uncertainty and “soft” business confidence were likely to hamper construction and manufacturing throughout the year. (Reporting by Daina Beth Solomon and Sharay Angulo Editing by Marguerita Choy)