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.

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Hasta la próxima!

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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.

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For more information, visit Delta Economics.

 

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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!

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