News, Insights and Best Practices for Manufacturing in Mexico

Mexico sees major trade surplus in April

17 Jun 2014

Category: Labor & Economics

Mexico reported another trade surplus in April as it experienced a surge in exports of manufactured goods, Bloomberg reported. This is further proof that Mexico's slow start to the year was only temporary, due partly to the weather and to the time needed for economic policy changes to take effect.

Previously, both the Mexican Ministry of Finance and the Central Bank had reduced their growth forecasts after a slow growth period for the first quarter. Much of the blame on the slow recovery has been put on the U.S.'s winter slump, as the U.S. receives 80 percent of Mexico's exports.

"The strong export rebound is behind this surprise, and this is positive for growth in the coming months," Marco Oviedo, the chief Mexico economist at Barclays Plc, told Bloomberg.

Delia Paredes, an economist at Grupo Financiero Banorte SAB, added that May 27's report "suggests that external demand is recuperating."

The net trade surplus was $510 million, according to Bloomberg. Of that total, 83 percent represents the exports of manufactured goods to foreign countries. Exports to the U.S. increased by 19 percent, and exports to Canada rose by 67 percent. Popular exports include light vehicles, which increased by 9 percent in April.

Peso volatility sees record low
The peso is also experiencing record low volatility, in part because of the improvement in the U.S. economy, according to Bloomberg Businessweek.

"Durable orders were very strong and support the view that the economy's rebound should be supported by the U.S.," Eduardo Suarez, a Latin America foreign-exchange strategist at Bank of Nova Scotia told Businessweek in response to a recent report indicated that the three-month historical volatility of the peso declined for the 32nd day in a row.

He added that the report was "consistent with yesterday's trade data."

Those wanting to take advantage of the promising improvements in Mexico's economy, as well as the stability of its currency, may consider expanding to Mexico by building a manufacturing center there. Those who would find such a task daunting may seek help from an experienced offshore shelter company that would guide the business through the process of finding the right site for building a facility, as well as navigating through the political red tape of establishing a company in both the U.S. and Mexico. Finally, a good offshore shelter would be able to help hire workers and manage the plant, allowing a manufacturing company to focus on what it does best: manufacture.

 

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