Mexican Industrial Production Fell in October

By Anthony Harrup Features Dow Jones Newswires

Mexican industry performed worse than expected in October, with production falling from the previous month as weakness in manufacturing and construction offset a recovery in oil and gas output.

Continue Reading Below

Industrial production slipped 0.1% seasonally adjusted from September, and was 1.1% lower than October 2016, the National Statistics Institute Tuesday. Output had been expected to rise 0.7% from a year earlier, according to economists polled by The Wall Street Journal.

Oil and gas production rose 8.5% from September, when state oil company Petróleos Mexicanos had shut in production following refinery disruptions caused in the U.S. by Hurricane Harvey, and in Mexico by a major earthquake. Construction activity and manufacturing each fell 0.6%, and utilities -- water, gas and electricity -- were down 4%.

Despite the drop from September, manufacturing remains the main engine of industrial performance, rising 2.7% from October of 2016 while mining, construction and utilities were all lower.

Factory output has been spearheaded by the auto industry, which saw production up 11% in October, with further growth in November guaranteeing record production of cars and light trucks for all of 2017.

Sluggish overall industrial output has kept a lid on economic growth, which contracted 0.3% in the third quarter but was up 2.2% in the first nine months of this year. Industrial production through October was down 0.6%.

Continue Reading Below

"We expect growth to moderate and the engines of growth to rebalance -- with higher contributions from manufacturing and net exports, and less thrust from services and private consumption," Goldman Sachs said in its recent outlook for the Mexican economy. "Absent major disruptions to trade, solid growth in the United States should support manufacturing export growth in 2018."

Write to Anthony Harrup at anthony.harrup@wsj.com

(END) Dow Jones Newswires

December 12, 2017 10:07 ET (15:07 GMT)