* Mexico Jan economic growth 3.24 pct year/year
* Jan month/month growth at 0.2 pct
* Strength was broad-based, in industry and services
By Alexandra Alper
MEXICO CITY, March 25 Mexico's economic activity
revived in January, on strength in the industrial and service
sectors, easing fears that the global slowdown is dragging on
Latin America's second biggest economy.
Official data on Monday showed economic activity
expanded by 0.20 percent in January compared with
the prior month. The expansion came after December's contraction
of a revised 0.97 percent, a nearly three-year low. December's
contraction was earlier reported as a 0.99 percent drop.
"It's a welcome rebound after December's plunge which ...
sparked fears that something was wrong with the economy," said
Luis Arcentales, a Morgan Stanley economist based in New York.
The monthly expansion was bolstered by a 1.1 percent
expansion in industry and 0.44 percent growth in services.
On an annual basis, economic activity grew 3.24
percent in the 12 months through January, its fastest pace since
November, outstripping the 1.42 percent expansion in the prior
month against a year earlier.
Healthy consumer spending and unexpectedly resilient demand
for Mexican manufactured goods north of the border has helped
shelter Mexico's economy from weaker global growth.
"What is encouraging is that industry, which tends to move
in tandem with the US, should see better figures ahead, because
the US industrial output has bounced sharply," Arcentales added.
U.S. manufacturing output rose in February in the latest
signal of strength in an economy that is showing clear momentum
despite the headwind from government austerity.
Mexican industrial production rebounded more than expected
in January on a strong bounce in construction after slowing the
most in almost four years at the end of 2012.
Strength in the services sector, which represents about 65
percent of Mexico's economy, could support growth if U.S. demand
flags, according to Barclays economist Marco Oviedo.
"We believe that this report is pointing to a good start of
the year for the sector, which could be able to
support activity amid the weakness from external demand," he
said in a note to clients.
Still, the government has projected Mexico's economy will
expand 3.5 percent in 2013, down from 3.9 percent in 2012.
The central bank cut interest rates to a record low of 4
percent earlier this month, citing concerns about weakening
In minutes released on Friday, most policymakers saw a weak
global environment and expressed concern about a slow recovery
north of the border, the destination for almost 80 percent of
Mexico's exports. U.S. demand for manufactured goods supported
growth last year.