Mexico’s exports down 2.9% in April, but up over 4% this year

Mexico’s exports experienced a slight setback in April, with a decline of 2.9% compared to the same period in the previous year, according to the national statistics agency INEGI. However, there is a positive trend overall, as exports in the first four months of the year saw a growth of 4.2%, reaching a value of US $187.3 billion

Preliminary data from INEGI reveals that the total export value for April amounted to US $46.22 billion, with more than 90% originating from non-oil products. While oil exports suffered a significant decline of 32.8%, generating only US $2.62 billion, non-oil exports experienced a much smaller decline of 0.2%.

The decline in oil exports can be attributed to the decrease in Mexican crude prices, with the average price per barrel of export-grade Mexican crude in April being US $69.32, compared to US $102.05 in the same period last year.

However, the value of non-oil exports sent to the United States increased by 0.3% annually in April, showcasing the continued demand for manufactured goods in the U.S. market. This trend is fueled by both strong demand and the phenomenon of nearshoring, where companies relocate their manufacturing operations closer to the U.S. market.

Gabriela Siller, director of economic analysis at Banco Base, noted that the decline in April’s exports was expected due to a slowdown in the U.S. economy. Despite the overall decline, manufactured goods remained the main driver of Mexico’s export revenue, with non-automotive manufactured goods increasing by 0.8% to US $27.81 billion. Automotive exports, on the other hand, experienced a decline of 2.7% annually, totaling US $12.9 billion.

In terms of imports, Mexico witnessed a 3.3% drop in April, amounting to US $47.73 billion. This decline, the first since February 2021, may indicate weakness in the domestic economy. Non-oil imports showed marginal growth of 0.1%, the slowest in over two years, while oil imports experienced a significant decrease of 27.5%.

Overall, Mexico recorded a trade deficit of US $1.51 billion in April and a deficit of US $6.3 billion in the first four months of the year. The fluctuations in exports and imports highlight the ongoing challenges and complexities faced by Mexico’s SMT industry and its economy as a whole.

Source: INEGI, El Economista, El Financiero