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Mexico's GDP is enjoying its best run of growth since before
dot.com bust in 2001. In Q3, the year-on-year gain was 4.6%, following
5.5% and 4.7% in Q1 and Q2, respectively. The quarterly growth in Q3 was
1.0% from Q2, led by construction and transportation. Manufacturing edged
up a mere 0.1% and didn't grow at all in Q2, but it had surged 2.9% in Q1 and is
ahead 5.1% year-on-year. These data were reported yesterday afternoon,
November 16, by INEGI, the Mexican government statistics institute.
· Government officials, speaking prior to the G-20 Conference in Melbourne, Australia, indicated that this pattern was in line with their hopes. Their aim is to diminish the Mexican economy's dependency on demand from the US. So they are emphasizing local construction and services industries. The financial sector and other business services are up 4.6% year-on-year for Q3, the same as total GDP, but they have been expanding more rapidly than the total for most of the last five years. Finance Minister Gil Diaz highlighted the growth in construction, fueled in part by expansion of mortgage lending. Indeed, during the first half of this year, mortgage lending at banks was running more than 40% ahead of last year. Gross value added in construction is up 7.7% in Q3 from a year ago and 2.6% Q3/Q2 alone. Another strong sector is transportation, storage and communication, up 9.4% year-on-year. Mexico's output of oil is slowing, but its production of natural gas is growing rapidly, and we would surmise that pipeline usage is one part of the gain in the transportation sector.