Mexico | Manufacturing slowed down in October, affected by US auto strike

Summary

The BBVA Multidimensional Manufacturing Indicator contracted (-)6.9% in October, bringing the average interannual variation of the first ten months of the year to 0.5% (vs. 5.3% in the same period of the previous year).

Key points

• Key points:
• The decrease in economic activity in the sector during the period is associated with the automotive strike in the US that began in mid-September and ended at the end of October.
• We anticipate an improvement in production in the last two months of the year, considering the restart of activities in the affected plants has already been carried out.
• Although the most recent consumption indicators in the US point towards a gradual slowdown in household spending (especially on goods), we consider in the medium term industry government support (IRA and CHIPS), will provide resilience to the sector.
• Considering the better outlook for economic activity for the end of the year, we have revised upward our GDP growth estimate for 2023 to 3.4% (3.2% previously), and for 2024 to 2.9% (2.6% previously).

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