Economic Overview: Mexico & Canada

Monday, 22 August 2011 22:29:42 (GMT+3)   |  
       

Mexico: After a strong first quarter, the Mexican economy slowed down in Q2. The monthly growth rate for April was disappointingly low (2.3 percent over last year), but a strong recovery in May (4.5 percent) made up some of the losses from the previous month. Consumer confidence is high--the index in June was the highest since March 2008. The manufacturing sector index decreased slightly in June but still stands at a solid 56. Remittances from Mexican workers overseas, mostly from the US, reached $2.02 billion in June--still 23 percent below the pre-crisis peak of October 2008. Mexico has seen quite an influx of foreign investments into its budding aerospace industry recently. As one example, Bombadier Inc, maker of the Learjet, has had a plant in Queretaro since 2006 that manufactures 85 percent of all composite parts going into the new Learjet 85. Mexico's exports of aerospace equipment will reach $3.5 billion this year.

Canada: Given the economic turmoil of its largest trading partner, the United States, it was no surprise that initial estimates for growth in Q2 point to a seriously slowing economy. Canada was long regarded as a stalwart of growth among the G7 countries, but economic reality is catching up. Economic growth declined in May after staying flat in April. Furthermore, estimates for Q2 are approximately an anemic 0.5 percent--matching growth rates for fellow G7 countries Germany and France. Factory sales fell 1.5 percent in June to their lowest level since November 2010. Another contributing factor to a stalling Canadian economy is the indebtedness of the Canadian consumer which has reached US proportions. In fact, the ratio of debt-to-disposable income sits at a record high level and is even higher than in the US. One noteworthy positive in Canada's economy is that unemployment in July fell to its lowest level since December 2008 as  private sector job gains were the strongest in eleven years.

General Data:

 
 

GDP latest quarter annual rate compared to previous one and year-year

Consumer Price Index

and last year

Industrial Production

Unemployment

Trade Balance past 12 months

Currency to one US$ as of  Aug 17 and last year

Mexico

+2.1% Q1

(+4.6%)

+3.3% Jul (+3.6%)

+3.7% Jun

5.4% Jun

Nil Jun

12.2 (12.6)

Canada

+3.9% Q1

(+2.9%)

+3.1% Jun (+1.0%)

+0.7% May

7.2% Jul

-$ 8.2bn May

1.02 (1.17)


Automotive and Steel Production  
 

Total Units July

+ - 2010

Units Year-to-date

+ - 2010

Steel Prod Jun

000/MT

+ - 2010

Year-to-date 000/MT

+- 2010

Mexico

 215,640

  +15.5%

1,525,940

+17.1%

1,686 (e)

+27.9%

9,195

+10.0%

Canada

103,212 

  -11.2%

1,188,423

-1.1%

1,100 (e)

 +7.5%

 6,615

+38.0%


Intra-NAFTA Steel Shipments June 2010 - May 2011 in Thousand Metric Tons

 

Ttl Intra-NAFTA

From US

From Mexico

From Canada

Canada

6,511

6,099

190

-

Mexico

3,883

3,444

-

440

US

8,380

-

2,671

5,709


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