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