Mexican Industrial Production Fell in September After Earthquakes

Mexican industrial output shrank more than expected in September as two major earthquakes affected already-battered oil and gas production, while manufacturing activity posted a slight decline.

Industrial production contracted 0.4% seasonally adjusted from August, the national statistics agency said Friday. Compared with September last year, it fell 1.2%, well above the expected 0.8% contraction.

The oil industry remained the main drag on output, with oil and gas production down 10% from August.

Oil production of state oil company Petróleos Mexicanos, or Pemex, fell abruptly in September as two earthquakes that hit central and southern Mexico prompted the temporary closure of Pemex's Salina Cruz refinery. The company reduced production as its crude storage was at full capacity.

Hurricane Harvey, which hit the U.S. Gulf Coast in late August, also closed a number of refineries, leading to the cancellation of several export shipments.

Pemex produced 1.73 million barrels a day of crude oil in September, a 18% decline from a year before. The oil industry accounts for 5% of Mexico's gross domestic product.

Construction increased 0.8% from August but public works were down 7%, reflecting steep budget cuts the Mexican government has ordered since 2015 due to the decline in oil prices.

Factory production, which had increased in the previous three months, declined 0.1% in September and was up 2.8% from a year earlier. Production of vehicles and auto parts and electronic goods were a bright spot, while textiles, clothing, and petroleum products fell.

Write to Juan Montes to juan.montes@wsj.com

(END) Dow Jones Newswires

November 10, 2017 10:00 ET (15:00 GMT)