July 25, 2014 / 1:35 PM / in 3 years

UPDATE 1-Mexico factory exports fall in June, marks largest drop this year

(Recasts with exports, adds details on imports, graphic)

MEXICO CITY, July 25 (Reuters) - Mexican factory exports fell in June by the most since last December, casting doubt on the strength of an economic recovery in Latin America’s No. 2 economy.

Factory exports dropped 1.4 percent in June from May, the national statistics agency said on Friday, after posting gains in the previous four months.

Most of Mexico’s exports are manufactured goods, and nearly 80 percent of the country’s total exports are sent to the United States.

Mexico’s economy is struggling to gain more traction due to sluggish domestic consumption. A weak first quarter pushed the government to slash its annual growth forecast for the year to 2.7 percent from 3.9 percent.

Non-oil consumer imports rose nearly 1 percent in June compared to May in a sign of stronger domestic demand.

But Friday’s report showed imports of factory parts and capital goods like machinery fell, possibly pointing to weak future growth in manufacturing production.

Mexico posted a $404 million trade deficit in June when adjusted for seasonal swings. In non-seasonally adjusted terms, Mexico posted a trade surplus of $424 million . (Reporting by Michael O‘Boyle Editing by W Simon)

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