Bloomberg — Mexico’s exports reached a record $53.6 billion in March, leading to an unexpected trade surplus, as the country continues to benefit from US demand for its manufactured products.
Total Mexican shipments abroad rose 3.2% in annual terms last month, faster than the 1.1% increase in imports, which hit $52.4 billion, the country’s statistics institute said on Thursday. That led to a $1.17 billion trade surplus, compared to a $900 million deficit expected by analysts in a Bloomberg survey.
Latin America’s second-largest economy has been profiting from the arrival of investments and factories that seek to ship across the border into the US market, a process known as nearshoring. In March, manufacturing exports grew 5.3% compared to the previous year, led by automobile production, which jumped almost 16%.
“Sequentially, oil and manufacturing exports were strong, but imports of capital goods were weak,” Alberto Ramos, chief Latin America economist at Goldman Sachs Group Inc., wrote in a note, adding that the improvement in the trade balance from a year ago was driven by the non-oil surplus.
To be sure, some analysts expressed caution about a downturn in the US. Indeed, growth in the world’s largest economy slowed in the first quarter by more than expected as tepid business investment and a pullback in inventories tempered a pickup in consumer spending.
“The idea that the deceleration in the United States will cause a fall in Mexico’s exports is still intact,” said Joan Enric Domene Camacho, senior economist for Latin America at Oxford Economics. “It’ll be a bit more delayed or smaller than expected, but the basic idea doesn’t change.”
This week, Mexico’s central bank Governor Victoria Rodriguez told lawmakers that nearshoring is an important opportunity for the nation.
“Nearshoring is happening and has great potential, but it still is in early beginnings,” said Bernardo Keiserman, an economist at Bradesco BBI, adding that consumer good demand from the US is a surprise on the upside.
--With assistance from Rafael Gayol and Maya Averbuch
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