Cyclic Indicator System of the Mexican Economy revealed a weakening in late 2021 and suggested it would continue to lose mobility.
Leading indicator entered Monthly drop of 0.14 points Last November, this is the biggest drop since April 2020, when it fell 0.30 per cent to 101.25 units as per INEGI records.
Furthermore, the indicator, which forecasts the phase of the cycle in which the economy will find itself in the future, revolves around four months with negative consequences.
For its part, the coinciding indicator stood at 99.63 points, showing a monthly progress of 0.05 points in October, and its lowest increase in the past 17 months.
Within this index, Global Indicator of Economic Activity (IGAE), which measures the current performance of the economy, has been linked to six months into contraction.
in the business cycle clock of INEGI, the indicator is in a rebounding zone, which means it is below its trendline and in contraction.
Gabriella Siller, Director of Analysis at Banco Base highlights that the Leading indicator shows a Stability occurs in the event of a difficult approach to Mexican Economy, where there is a possibility of a return to bearish territory before an extension is reached, which is known as a double decline.
He warned that further There are many risks to the economy, such as bottlenecks in the global supply chain, high inflation pressureThe Fed’s less flexible monetary policy, uncertainty in the regulatory framework, new virus variants And Uncertainty over the monetary policy of Banco de Mexico,
“The behavior of the coincidence indicator is related to a slowdown due to supply chain disruptions, poor performance in the industrial segment and, in general, supply disruptions from the global segment”, explained Mexican economist Pamela Diaz Lubet at BNP Paribas.
He said that the second factor is due to the decrease in domestic demand. high levels of inflation Which affected the income and confidence expectations of the consumers,” he said.
On the leading indicator, he said that though it remains above its long-term trend, it shows bearishness as the labor market is no longer solid and business confidence has suffered due to sluggish domestic demand.
“Coincidence Indicator Shows Whether Trying To Retest The Earlier Levels” global pandemic, but it is observed that progress is very slow, affected by the service sector, given the changes in the sub-contracting law, with this, companies began to reduce their contribution to the economy “, Ramón de la, deputy director of Rosa said economic analysis for Actinver.
He explained that the advanced factor gives an indication that the peak of growth has already been reached in Mexico and, going forward, economic activity will present a more modest growth, ie closer to 2 or 3 percent.
“The data suggest that the economy is in the bottom phase of a cycle that was very short, or that the recovery from the pandemic can be interpreted as a rebound, not a continuous process of economic reactivation. In fact, the prospects for the next year are dark growth with inflation,” said Miguel González, coordinator of UNAM’s Center for Financial Studies and Public Finance (CEFI).
added that problems of the international economy, such as pressure on supply chains, persistent inflation and production problems, suggest an eventual tightening of international monetary policy.
“In this context and with private investment contracting, the outlook for Mexican activity does not look very promising,” he warned.
In another report, Monthly Indicator of Construction Activity (IMOAM), the original figures projected an annual growth of 0.9 percent for the industry, meaning it is in a recession.
This result comes after the fact that it registered a growth of 1.18 per cent in October, a decrease of 0.11 per cent in September and a growth of 6.68 per cent in August, according to INEGI data.