Manufacturing in Mexico Confirms a Positive Turnaround

Published On: October 28, 2013

In the third quarter of 2013, Mexican indicators confirmed that Manufacturing in Mexico is the driving factor to Mexico’s continued economic turnaround. This follows a strong resumption of manufacturing production and export performance by North America’s number three economy. Mexico’s strong export-based policy is proving a significant force in global trade. Unlike the protectionist policies of Latin American countries to the South, the emphasis on manufacturing in Mexico has created the kind of economic boom that the nation has been working toward.

With signals that Mexico’s economic growth is now moving in a positive direction, macroeconomic predictions indicate that the country will continue to be on the upswing in trade and employment, also benefiting its neighbor to the North. Industrial production is on an increase, in spite of a lull in construction by the end of the third quarter. The advance in manufacturing output has been consistent for a number of months. This is good news for an economy largely driven by manufacturing production.

New projects slated for the development of public sector infrastructure by the Mexican Government are set to begin in 2014. Private foreign direct investment earmarked for some of those projects should boost construction back to a positive growth status. The reported advance by Mexican auto manufacturers in the past year has been substantial enough to return the nation’s economy back to a growth prospectus.

Other economies of scale are destined to follow suit. Manufacturing in Mexico has recuperated the country’s economic position. The potential for Mexico as a force in trade has never been better. Strong fiscal and monetary policies have contained the once inflationary market to the extent that consumer spending now exceeds most economic forecasts.

Consumer spending is also on upward swing, with trends in major and luxury purchases better than ever. Mexico’s commitment to the auto manufacturing sector is also mirrored in the consumer auto product segment. Related economies of scale like the Mexican oil industry stand to benefit from this general trend in auto consumption.

The prediction that the foundation is laid for a bullish economy is here. If the Mexican market continues to offer investors bullish options for profit, we will likely see more liquidity pumped into the economy than expected.

Unemployment indicators are positive too, as there has been a notable drop in job losses. The trend in employment looks promising, say economists. In spite of adjusted seasonal reporting, there has been a marked drop in unemployment across the country. In metropolitan areas, urban unemployment dropped from 6.4% to 5.9% in the past year.

As Mexico’s balance of trade increases through export driven trade, the reduction of the country’s deficit is imminent. Economists are especially sold on Mexico’s capabilities in global export in the face of competitive ascension by BRIC countries and especially China. If the formula for economic growth maintains its steady pace, it is likely we will see Mexico rise as the next powerhouse among the world’s emerging economies.

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