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  March 29th, 2017 | Written by

Is Mexico’s Surprise Surplus a Portent of Export Reversal to Come?

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  • Mexico’s February trade surplus was a $680 million surprise.
  • Economists expected Mexico to run a $350 million trade deficit, not a surplus.
  • Mexico’s trade surplus was driven by a surge in oil prices.

Mexico delivered a trade surplus of $684 million in February, according to official figures, compared to A $350 million deficit expected by economists surveyed by Bloomberg. The 7.9-percent rise in exports masked a 69-percent jump in oil exports. That shouldn’t have been a surprise after oil prices climbed 66 percent and came within a broader 32.1-percent increase in exports of energy products, Panjiva data shows.

The surprise likely came from a 1.3-percent drop in imports excluding energy products, which followed three straight months of increases. That may reflect a mixture of a weaker peso as well as uncertainty about near-term trade policy after the Mexican government took a more proactive approach to renegotiating NAFTA.

Trade surpluses aren’t always a good sign. Calculations based on Inegi data Source: Panjiva









The decline in imports is concerning as it may carry the seeds oflower exports subsequently. Panjiva analysis of Mexico’s top 500 import lines shows significant drops in computer components including disc drives (which slumped 60.3 percent on a year earlier) and motherboards (29.3 percent lower).

A slide in wiring systems for autos (21.6 percent down) may put a cap on the 10-percent climb in completed auto exports experienced during the month. The drop also reflects slowing customer markets, as experienced in areas of the furniture industry where US imports dropped 11 percent and Mexican imports of metal furniture components slumped 73.9 percent.

Manufacturing led import slowdown. Chart shows Mexican imports during the most recent month compared to a year earlier segmented by HS code, top 300 items by total value shown. Source: Panjiva