UPDATE 1-Mexico's economy grows at fastest pace in over 2 years in Q3

(Adds details on components of GDP)

MEXICO CITY, Oct 31 (Reuters) - Mexico’s economy is on track to post its fastest growth in more than two years as services growth picked up in the third quarter even as industrial output shrank, preliminary data showed on Monday.

Gross domestic product grew more than expected in a Reuters poll, up by about 1.0 percent from the prior quarter, according to seasonally adjusted data from Mexico’s statistics agency (INEGI).

If confirmed by data on Nov. 23, that would be the fastest quarterly expansion since the second quarter of 2014.

Economists polled had expected a 0.8 percent increase in GDP in the July-September period. The economy shrank 0.2 percent in the second quarter, its first contraction in three years.

According to INEGI’s initial estimates, the industrial sector contracted 0.1 percent from the April-June period. Weak demand in the United States for Mexican-made goods has weighed on Latin America’s second biggest economy.

Mexico’s agricultural sector grew 1.2 percent, the data showed, while services grew 1.5 percent, on track to post its fastest quarterly expansion since the third quarter of 2011.

Compared with the third quarter of 2015, GDP expanded 2.0 percent, slightly above analysts’ expectations for 1.9 percent growth. Growth was 2.5 percent in the second quarter compared to the year-ago period. (Reporting by Veronica Gomez; Editing by Chizu Nomiyama and Bill Trott)