DeltaCast: Good Tidings We Bring

According to Delta Economics’ latest forecast, Mexico’s diverse export portfolio will safeguard it against falling oil prices. Compared to other Emerging Markets, Mexico enjoys stronger economic fundamentals and this is likely to aid progress well into the New Year and beyond. Gains for fellow MINT members are likely to be modest in comparison as a result of their heavier reliance on commodities. For example, Turkey’s exports of mechanical appliances and computers will see 2.4% growth year-on-year compared with 6.3% growth for Mexico – only Nigeria will fare better, with growth expected to increase by 10.4%. Mexico’s exports of motor vehicles will see growth hit 6.6%; this is higher than the 4.5% expected from Indonesia, but behind Nigeria, where growth is expected to improve by 9.5% year-on-year in December.

Given the time of year, it’s only fitting to mention the flow of festive goods coming into Mexico: December will see imports of edible meats (which includes Turkeys) increase by 6.3% year-on-year to an estimated value of $350million; this is slightly down from its peak in October of $383million. Imports of other festive goods such as lighting, furniture and fittings increased by 6.6%, whereas the imports of toys, games and other festive articles increased by 3.7% year-on-year in November. But it’s not just imports that will see substantial gains this season, exports too will prosper: in December, exports in edible meats are forecast to go up by 10.4% on the previous year. That’s a lot of roast dinners being consumed over the festive period!

Overall, we estimate Mexican trade will grow by 3.4% in 2014: this is slightly down on previous forecasts but still better compared to other Emerging Markets. We are slightly more optimistic on trade prospects in 2015 and forecast annual trade growth to rise by 5% on 2014. Mexico has enjoyed an impressive growth spurt and in order to continue this upward trend, the government needs to ensure the political situation remains under control. Nevertheless, as we have stated in previous Delta Casts, Mexico is heavily reliant on the North American Market for its trade, so the recent pickup in the US will no doubt prove an unintended boon to the Mexican economy going forward.

On that note, we sign off by saying: we wish you a Merry Christmas and Happy New Year!

For more information, visit Delta Economics.

2014-12-18_laPinata_week018_v02a

Hasta la próxima!

Clicky

DeltaCast: Everybody Needs Good Neighbours

Delta Economics forecasts that Mexican exports will continue to gain momentum over the festive period and into the New Year.

Although the USA and Canada still import the largest share of Mexican products, business remains brisk with these partners. There seems to be a growing dependence in terms of Mexican trade ties with their Latin American counterparts: Brazil is poised to buy a substantial amount of bellwether goods from Mexico: exports in vehicles will grow by 12.7%, locomotives 15.4% and machinery and mechanical appliances by 10.4% year-on-year in December. Trade with Colombia will also improve by 11.4% in vehicles and by 5.5% in machinery and mechanical appliances. Exports to Peru will rise by 17.9% in locomotives whilst with Chile, exports in electrical machinery and telecoms will grow by 4.4% year-on-year in December. Trade with Argentina will increase in vehicles by 11.3% in December year-on-year.

As we have mentioned in previous weeks, the Mexican economy is showing healthy signs of growth and this is particularly so in the technology-orientated sectors where the pickup remains relatively stable.

2014-12-12_laPinata_week017_v01a

For more information, visit Delta Economics.

 

Hasta la próxima!

Clicky

DeltaCast: Home Coming

Mexico’s trade with Asia is set to strengthen according to Delta Economics. The forecast for December is especially encouraging: outbound goods to China will see a 14.4% rise on the previous year, whilst exports to Japan and India will see respective improvements of 8.3% and 13.6% year-on-year. Indeed, we expect Mexican trade with a number of other Asian nations to exhibit strong growth. For example, exports to South Korea will grow by 15.2% year-on-year, to Singapore by 13.3% and with Hong Kong by 10.6%. However, Delta Economics is also seeing strong movement in trade coming back to Mexico, a term known in the industry as re-shoring.

Whilst wages tend to be lower in China and Asia, Mexico offers greater flexibility for businesses in terms of shorter supply chains and more favourable economic conditions. We see technology sectors returning to North America to be closer to their customer base and some of these are doing particularly well: as a result, growth in sectors for vehicles, which include items such as cars, trucks and motorcycles, are expected to grow year-on-year by 6.4% in December, whilst exports in heavy machinery, which include items such as office and household appliances as well as computers, will see year-on-year growth of 7.4% in December.

For more information, visit Delta Economics.

Hasta la próxima!

Clicky

DeltaCast: Now or NAFTA

According to Delta Economics, Mexico’s relationship with its NAFTA partners is more important than ever: trade with Canada is expected to increase year-on-year by 10% in December, whilst trade with the USA is expected to grow by 4.3%. Mexico relies heavily on its NAFTA partners which purchase 80% of all Mexican goods.

Delta Economics expects technology sectors to do particularly well: exports to the USA and Canada remain strong and this has been underpinned by the success of the American economy in (Q3)2014. The outlook in December looks stable with exports in computers/mechanical appliances up 9.4% year-on-year. Growth in this sector will be spurred by a 9.5% increase in exports to USA and a 12.5% rise in exports to Canada.

Another notable sector is vehicles and in December, sales will grow by 8.3% year-on-year due to a 6.9% rise in sales to the USA and 16% growth in sales to Canada. There is also good news in terms of exports in locomotives, which will increase by 7.5% year-on-year; from this figure, sales to Canada will leap ahead by 12.2% and those to the USA will increase by 7.1%.

Exports remain the “bread and butter” for the Mexican economy and so with its strong ties with NAFTA, growth is likely to persist. For more information, visit Delta Economics.

2014-11-28_laPinata_week015_v01a

Hasta la próxima!

Clicky

DeltaCast: MINT Condition

The Mexican economy remains relatively robust compared to other Emerging Markets. Nowhere is this picture more obvious than with fellow MINT members. Delta Economics forecasts that Mexico’s annualised trade in 2014 will grow by 5.3%, while Indonesia’s is projected to increase by 9.6%, Nigeria’s by 3.9% and Turkey’s by 4.3%. But in spite of these promising results, the outlook for November’s year-on-year growth position looks more volatile.

Delta Economics can report that for November’s year-on-year forecast, Indonesia, Nigeria and Turkey will experience a bumpy ride ahead. Mexico will fare better because of its sound economic fundamentals and diversified trade portfolio. As reported in previous weeks, the bellwether products will do particularity well: exports in electrical goods are expected to rise 5.7% year-on-year, whilst sales in road vehicles will increase by 12.6% and machinery and computers will grow by 13.5%, year on year in November.

Despite the general slowdown in global demand, the domestic reforms being pushed through seem to be gaining good traction for the Mexican economy. For more information, visit Delta Economics.

2014-11-21_laPinata_week014_v01a

Hasta la próxima!

Clicky

Weekly Summary

We listened to a provocative podcast this week produced by Freakonomics “Should the U.S. Merge With Mexico?“. If you’re listening to anything we should know about, let us know.

Our colleagues from Delta Economics explains that while Mexican exports are growing with its some of its regional trading partners, it must continue to strengthen its institutions and work on moving its exports base towards more value-added products.

Hasta la próxima!

Clicky

DeltaCast: Mexican Trends

According to the latest forecast by Delta Economics, Mexican exports are set to grow year on year by 9.7% in November. In particular, there are encouraging signs ahead with some of its regional trading partners. Whilst combined, the USA and Canada consume the largest slice of the Mexican export pie (80%), trade with fellow Latin American partners are picking up steam too: this trend is especially so when it comes to some of the tech-orientated bellwether products for Mexico. For November, sales are expected to improve year on year with Argentina in products such as road vehicles, up +17.9%, and in computers by +6.4%. Exports to Brazil remain healthy as ever: trade is projected to grow year-on-year for items such as road vehicles +19.5%, computers +16.7% and electrical machinery +13.7%. And for Colombia too, trade in road vehicles are expected to increase year-on-year by 18%, whilst exports in computers will grow by 12% and those in electrical machinery by +5.8%.

For the time being at least, the Mexican economy is weathering the storm; but in order to remain ahead of the curve, Mexico must continue to strengthen its institutions and work on moving its exports base towards more value-added products.

For more information, visit Delta Economics.

2014-11-14_laPinata_week013_v01a

 

Hasta la próxima!

Clicky