Mexico | Weak start of the year for manufacturing in 2024

Summary

The BBVA Multidimensional Manufacturing Indicator (BBVA MMI) grew 0.3% YoY in January, pointing to modest growth in the sector given the gradual slowdown in demand for durable goods in the US.

Key points

• Key points:
• In December, the manufacturing subsectors that recorded the largest drops in production were transportation equipment (5.6% MoM) and clothing (-5.5% MoM).
• We anticipate modest dynamism in the manufacturing sector going forward, in a context of lower demand for durable goods in the US, as households in that country exhaust their excess savings, in an environment of high interest rates and normalization of spending patterns.
• We estimate that in the medium and long term the manufacturing sector would benefit from the process of relocation of global value chains (nearshoring), in an environment of geopolitical tensions between the US and China.
• Considering the dynamism that the different components of domestic demand have shown in recent months, we bias downward our estimate for GDP growth for this year (BBVA 2.9%).

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