Mexico’s industrial output declined in June, the first time to do so since December, contrary to expectations. This has fuelled skepticism about the degree of economic recovery in the Latin American country.
Industrial output plunged 0.2 percent in June from May, reported the national statistics agency on Monday. Economists in a Reuters survey had expected the industrial activity to increase by 0.19 percent down from May’s 0.3 percent growth.
Factory production, a key constituent of industrial production, contracted 0.7 percent in June from the previous month, the steepest decline since December. Mexico mostly exports manufactured items, of which 80 percent are sent to the United States. The construction industry component, which declined in May and shrunk significantly last year, recovered to 1.2 percent growth, the fastest pace since November.
Industrial output grew 2.0 percent in June from a year ago, against forecasts of a 1.7 percent growth. The figure had earlier increased by a revised 1.9 percent in May. The output of utilities remained slightly flat in contrast to the previous month, while the mining activity component fell 0.6 percent as oil output fell.
A poor start to 2014 drove the Finance Ministry to reduce its yearly growth estimate for this year to 2.7 percent from its earlier forecast of 3.9 percent. Analysts expect the economy to expand by 2.6 percent due to weak second quarter performance.
Meanwhile, London-based broker Hamptons International expects property market to grow by a much lower 3 percent in 2015 due to higher mortgage rates. The broker expects housing prices to increase 15.5 percent this year, more than double its earlier estimate. It also forecasts home prices in England and Wales to increase 8 percent in 2014 and 5.5 percent next year.
Hamptons also predicts that values in pricey London boroughs such as Westminster, Chelsea & Kensington to increase 10 percent in 2014 from its previous forecast of 3 percent set in September. The prices are expected to increase 3 percent next year. To register for a free 2-week subscription to ForexMinute Premium Plan, visit www.forexminute.com/newsletter.
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