UPDATE 2-Mexico industrial output falls by most in 9 months

Mon Nov 11, 2013 10:28am EST

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MEXICO CITY Nov 11 (Reuters) - Mexican industrial output slumped in September by the most in nine months, on weakness in manufacturing, construction and utilities - a worrying sign amid a nascent recovery in Latin America's No. 2 economy.

September industrial activity fell 1.2 percent versus August, far short of forecasts in a Reuters poll for a flat reading, the national statistics agency said on Monday.

The figure was below the upwardly revised 0.6 percent expansion in August and marked the biggest contraction versus the previous month since December 2012.

Mexico's factories have traditionally moved in near lock step with the U.S. manufacturing sector. In September, U.S. manufacturing expanded by only 0.1 percent, slowing from 0.5 percent in August, as automobile output slowed..

In Mexico, manufacturing fell by 1.07 percent compared to the prior month, its biggest contraction since September 2012.

Manufactured goods account for most of Mexican exports, of which a major portion are motor vehicles and auto parts.

In September, construction slipped by 1.45 percent and utilities by 0.67 percent compared with August.

Mining was the only industrial sector component which rose, expanding by 0.23 percent.

Mexican growth contracted in the second quarter for the first time in four years on low government spending and a sagging construction sector, but policymakers have said there are signs of an economic recovery.

Industrial output fell 1.6 percent in September from a year earlier, missing expectations for a 0.5 percent decline. In August, output was down by 0.4 percent on the year.

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