Economic overview Mexico and Canada - January 19, 2007

Mexico: GDP: + 4.6% in Q3 2006, an estimated 4.4% for the year. The initial outlook for 2007 is 3.2%. Industrial Output: + 4.8% in November 2006 (compared to Nov 2005) - this is a slight improvement over October's growth of 4.6%. Consumer Prices: + 4.05% in December 2006 for the previous 12 months (3.33% a year ago). Core inflation in December was 0.43%. Estimates for 2007 put the CPI at + 3.8%. Unemployment: 3.58% in November 2006 (2.99% the year before). The official Mexican unemployment numbers are always surprisingly low. Experts point to massive underemployment in low paying jobs that keeps this number so low when, in actuality, an ever growing amount of Mexican citizens are seeking employment by any means north of the border. Trade Balance: - $5.9 billion in Nov. 2006 for the previous 12 months Vehicle Production: 130,479 units in December 2006, a 9.7% decrease from a year earlier. Year-to-date December: 2,042,222 units were produced - a healthy 21.4% surge compared to 2005. Steel Production: 1.4 million (e) mt in November 2006, and 14.9 million mt year-to-date November. Both numbers are practically unchanged from a year ago. The Mexican steel market in 2006 turned very hot in the summer with prices soaring. This has now been replaced by widespread capacity curtailments in order to prop up declining prices. Currency: Peso 10.9 to US$1 as of January 18, 2007 (Peso 10.6 to US$1 a year ago) Canada: GDP: The economy stagnated in October (0.0% growth), after contracting slightly in September (-0.4%). Estimated growth for 2006 is 2.8%. Experts blame the slowing US housing market and low automotive sales in the US for these disappointing numbers. The Bank of Canada predicts a growth rate of 2.8% in 2007. Industrial Production: - 2.4% in October 2006 Consumer Prices: + 1.4% in November 2006 Unemployment: 6.1% as of December 2006 Vehicle Production: 187,238 units were built in December, a 5.5% decrease from a year ago. Year-to-date December: 2,572,304 units were produced - a not so healthy 4.3% behind compared to the previous year. Steel Production: 1.3 million (e) mt in November 2006, or 8.2% ahead of last year. Year-to-date November: 14.6 million mt were produced - an increase of 3.8% over last year. Currency: CA$1.17 to US$1 as of January 18, 2007 (unchanged from a year ago but still too strong a rate in the opinion of most experts).