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Released: Thursday, October 25, 2012

The Conference Board Leading Economic Index® (LEI) for Mexico declined 0.2 percent and The Conference Board Coincident Economic Index® (CEI) increased 0.4 percent in August.

  • The Conference Board LEI for Mexico fell slightly in August following a sharp increase in July. Large declines in net insufficient inventories, the construction component of industrial production, and stock prices more than offset positive contributions from oil prices and the (inverted) real exchange rate.  With the decline in August, the leading economic index contracted 0.3 percent during the past six months (about a -0.7percent annual rate), a reversal from the increase of 1.8 percent (about a 3.7 percent annual rate) for the previous six months. Moreover, the weaknesses among the leading indicators have become more widespread than the strengths in the last six months.  
  • The Conference Board CEI for Mexico, a measure of current economic activity, increased again in August with all three components advancing. Between February and August 2012, the coincident economic index grew by 2.1 percent (about a 4.3 percent annual rate), about the same rate of increase as in the previous six months. Meanwhile, real GDP increased at a 3.5 percent annual rate in the second quarter of 2012, down from 4.9 percent (annual rate) in the first quarter.
  • The LEI for Mexico fell in August – the fourth decline in the last six months. As a result, the six-month change in the index has turned negative for the first time since the end of 2011. Meanwhile, the CEI for Mexico increased in August, and its six-month growth rate has been fairly steady so far this year. The recent weakness in the LEI for Mexico suggests that although the economy will continue to expand, the rate of expansion may moderate in the near term.

LEADING INDICATORS.  Two of the six components that make up The Conference Board LEI for Mexico increased in August. The positive contributors to the index — from the larger positive contributor to the smaller one — are the US refiners’ acquisition cost of domestic and imported crude oil and the (inverted) real exchange rate.  Net insufficient inventories, the industrial production construction component, and stock prices decreased, while the (inverted) federal funds rate remained unchanged in August.

With the 0.2 percent decrease in August, The Conference Board LEI for Mexico now stands at 121.6 (2004=100).  Based on revised data, this index increased 1.4 percent in July and declined 0.6 percent in June.  During the six-month span through August, the index declined 0.3 percent, with two of the six components increasing (diffusion index, six-month span equals 41.7 percent).
    

COINCIDENT INDICATORS.  All three components that make up The Conference Board CEI for Mexico increased in August. The positive contributors — from the largest positive contributor to the smallest one — are number of people employed (measured by IMSS beneficiaries), industrial production, and retail sales.  

With the increase of 0.4 percent in August, The Conference Board CEI for Mexico now stands at 121.1 (2004=100). Based on revised data, this index increased 0.2 percent in July and increased 0.6 percent in June.  During the six-month span through August, the index increased 2.1 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. October 23, 2012.

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

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