The Conference Board CEI for Mexico, a measure of current economic activity, increased for a third consecutive month in July, led by large positive contributions from industrial production and employment. Between January and July 2011, the coincident economic index increased 1.8 percent (about a 3.7 percent annual rate), slightly faster than the 1.7 percent increase (about a 3.4 percent annual rate) for the previous six months. In addition, the strengths among the coincident indicators have been very widespread, with all components increasing over the past six months. Meanwhile, real GDP increased at a 4.5 percent annual rate in the second quarter of 2011, after increasing at a 2.4 percent annual rate in the first quarter.
The Conference Board LEI for Mexico declined in July, its third decline this year. Additionally, its six-month growth rate slowed – amid widespread weaknesses – after remaining stable in the previous month. Meanwhile, The Conference Board CEI for Mexico continued its general upward trend that started in mid-2009, and its six-month growth has remained within a narrow range this year. Taken together, the behavior of the composite indexes suggests that economic activity will continue to expand, albeit at a moderate pace in the near term.
LEADING INDICATORS
Two of the six components that make up The Conference Board LEI for Mexico increased in July. The positive contributors to the index — from the largest positive contributor to the smallest one — are the (inverted) real exchange rate and the industrial production construction component. The negative contributors – from the largest negative contributor to the smallest one – are net insufficient inventories, stock prices, and the US refiners’ acquisition cost of domestic and imported crude oil. The (inverted) federal funds rate remained unchanged in July.
With the 0.1 percent decrease in July, The Conference Board LEI for Mexico now stands at 120.7 (2004=100). Based on revised data, this index increased 0.2 percent in June and decreased 0.4 percent in May. During the six-month span through July, the index increased 1.1 percent, with two of the six components increasing (diffusion index, six-month span equals 41.7 percent).
COINCIDENT INDICATORS
Two of the three components that make up The Conference Board CEI for Mexico increased in July. The positive contributors - from the largest positive contributor to the smallest one - are industrial production and number of people employed (measured by IMSS total beneficiaries). Retail sales declined this month.
With the increase of 0.3 percent in July, The Conference Board CEI for Mexico now stands at 115.7 (2004=100). Based on revised data, this index increased 0.3 percent in June and increased 0.2 percent in May. During the six-month span through July, the index increased 1.8 percent, with all three components increasing (diffusion index, six-month span equals 100.0 percent).
