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Benchmark Revisions - May 2008

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Released: Thursday, May 15, 2008

This month's release of the Mexico LEADING ECONOMIC INDICATORS AND RELATED COMPOSITE INDEXES incorporates annual benchmark revisions to the composite indexes which brings them up to date with revisions in the source data. The indexes are updated throughout the year, but only for the previous six months. Data revisions that fall outside of the moving six-month window are not incorporated until the annual benchmark revision is made and the entire histories of the indexes are recomputed. The benchmark revisions introduced methodological changes to both the coincident and leading indexes. For more details, please see page 3.

The Conference Board announced today that the leading index for Mexico increased 2.0 percent and the coincident index increased 0.3 percent in March.

  • After posting a strong gain in February, the leading index increased sharply in March more than offsetting the three consecutive declines from November to January. In March, the oil price, net insufficient inventories and stock price components made very large positive contributions. As a result, the leading index rose 3.5 percent (a 7.1 percent annual rate) between September 2007 and March 2008. This is only slightly below the growth rate of 3.6 percent (a 7.3 percent annual rate) that prevailed during the previous six-month period of March 2007 to September 2007. In addition, the strengths among the leading indicators have become somewhat more widespread in recent months.
  • The coincident index, a measure of current economic activity, increased modestly in March with all components contributing to this gain. Since September of 2007, the coincident index has increased by 1.9 percent (a 3.8 percent annual rate), the same growth rate that prevailed during the six-month period between March 2007 to September 2007. The strengths among the coincident indicators have been very widespread in recent months.
  • Following a slight decline in the second half of 2006, the leading index grew steadily during most of 2007. At the same time, the coincident index has been increasing since the second quarter of 2007 after a brief pause in the first quarter of 2007. Real GDP grew at about a 3.0 percent annual rate in the fourth quarter of 2007, down from a 5.3 percent average annual rate in the second and third quarters. The recent behavior of the leading and coincident indexes suggests that moderate economic growth is likely to continue in the near term.

LEADING INDICATORS. Five of the six components that make up the leading index increased in March. The positive contributors to the index — from the largest positive contributor to the smallest one — are the US refiners' acquisition cost of domestic and imported crude oil, net insufficient inventories, stock prices, the (inverted) real exchange rate, and the industrial production construction component*. The (inverted) federal funds rate remained unchanged.

With the 2.0 percent increase in March, the leading index now stands at 171 (1990=100). Based on revised data, this index increased 1.1 percent in February and declined 1.0 percent in January. During the six-month span through March, the index increased 3.5 percent, with four of the six components increasing (diffusion index, six-month span equals 66.7 percent).

COINCIDENT INDICATORS. All three components that make up the coincident index increased in March. The positive contributors — from the largest positive contributor to the smallest one — are industrial production, number of people employed (measured by IMSS beneficiaries)* and retail sales*.

With the increase of 0.3 percent in March, the coincident index now stands at 169.8 (1990=100). Based on revised data, this index increased 0.7 percent in February and remained unchanged in January. During the six-month span through March, the index increased 1.9 percent, with all three components increasing (diffusion index, six-month span equals 100.0 percent).

DATA AVAILABILITY. The data series used to compute the two composite indexes reported in the tables in this release are those available "as of" 10 A.M. May 13, 2008. Some series are estimated as noted below.

NOTES: Series in the leading index based on The Conference Board estimates include industrial production — construction component. The series in the coincident index based on The Conference Board estimates include industrial production, retail sales and employment.

THESE DATA ARE FOR ANALYSIS PURPOSES ONLY. NOT FOR REDISTRIBUTION, PUBLISHING, DATABASING, OR PUBLIC POSTING WITHOUT EXPRESS WRITTEN PERMISSION.

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