“The decrease in economic activity in the sector during the period is associated with the automotive strike in the US that began in mid-September and ended at the end of October,” he indicated.
Manufacturing activity in Mexico slowed down in October due to the strike that began in the industry in the United States in mid-September, the BBVA Mexico bank said on Wednesday.
According to its “BBVA Multidimensional Manufacturing Indicator” the secondary activity in the country contracted 6.9% in October.
With this, the BBVA Mexico report added, the average interannual variation of the first ten months of 2023 amounts to 0.5%, lower than the 5.3% registered in the same period of the previous year.
“The decrease in economic activity in the sector during the period is associated with the automotive strike in the US that began in mid-September and ended at the end of October,” he indicated.
However, the BBVA analysis foresees an improvement in production in the last two months of the year, “considering that the restart of activities in the affected plants has already been carried out.”
“We anticipate that the automotive segment will report better performance during November, given the resumption of activities in the sector in the US., after the end of the strike in that country (United Auto Workers),” he noted.
Until September, the automotive sector had reached a production level that was 13% above its pre-pandemic figure.
BBVA also anticipated that vehicle consumption in the US will resist due to government support for the industry in that country, despite the fact that the most recent indicators point towards a gradual slowdown in household spending, especially on goods.
According to data from the National Institute of Statistics and Geography (Inegi), in September, the Manufacturing subsectors also recorded levels below 2019starting with the manufacturing of clothing, with volumes up to 10% below their pre-covid figure.
The wood industry follows behind, with a drop of -7.6%; and the 7.2% decline in the manufacturing of textile products.
In contrast, the segments that have shown the greatest progress with respect to their pre-pandemic level are: the manufacturing of petroleum derivatives, with an increase of 28.2% from its level in 2019, the manufacturing of metal products, with a growth of 28.1%, and the manufacture of accessories and electrical appliances, with 23.3%.
For his part, he indicated that even with the tightening of financing conditions in the sector, in the medium term, the industry as a whole will benefit from government support for the US industry.
“Added to the above is the expectation of relocation of production in global value chains in the coming years (nearshoring) and the dynamism that private consumption has shown in recent periods,” he concluded.
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