Economic overviews of Mexico & Canada – November 11, 2008

Mexico: The triple assault on Mexico's economy - the global financial turmoil, declining oil prices and severe economic downturn in the US -- is taking its toll. October was a brutal month. Consumer confidence fell to 82.0 (from 88.6 in September), its lowest level since this index was introduced in 2001. The currency fell 15% to its lowest rate against the USD since December 1993 when Mexico abandoned the currency peg. Inflation quickened to its fastest annual pace in seven years, which will probably prevent any interest rate cuts in the near future. GDP growth was slightly negative in August and initial estimates for Q3 call for a paltry growth of 1.7%. The Central Bank revised its forecast for next year to 1.0%.

Canada: The poor economic conditions of its neighbor to the South have had a detrimental impact on Canada as well. However, there are two big exceptions. Building permits increased an unexpected 13.4% in September, carried by a strong non-residential sector. Also, the Canadian economy managed to add 10,000 jobs in October in sharp contrast to the US where the job losses are reaching catastrophic proportions but productivity is increasing. In Canada productivity is getting worse. However, jobs are being generated in Canada and for the first time in 26 years, and unemployment there is lower than in the US.

General Data:

Automotive and Steel Production

Total Intra-NAFTA Steel Shipments Jan-July 2008 in Thousand Metric Tons