Monday, June 24, 2024

Industrial output plummeted 30% in April; worst decline since 1993

The coronavirus pandemic and associated economic restrictions took a heavy toll on the industrial sector last month.

Industrial output declined by a record 29.6% in April compared to the same month of 2019, the National Institute of Statistics and Geography (Inegi) reported on Thursday. Compared to March, industrial production was down 25.1% in April.

The annual decline is the worst since industrial output records were first kept in Mexico in 1993. April was the first full month in which all nonessential economic activities were suspended due to the coronavirus crisis.

Major slumps in both the construction and manufacturing sectors drove the overall decline.

Activity in the construction sector plummeted 38.4% in April compared to the same month of 2019, Inegi said. It was the worst result for the sector since June 1995.

Manufacturing output declined 35.5%, the biggest year-over-year slump on record, with 20 of 21 sub-sectors reporting red numbers in April. Transportation equipment manufacturing, which includes the automotive sector, declined 85.3% last month.

Activity in the energy and mining sectors also declined but the annual downturns in both cases were limited to less than 4%.

The energy sector downturn was the worst since October 2017 while the decline in output in the mining sector ended a five-month growth streak.

Goldman Sachs economist Alberto Ramos said in a note to clients that the industrial output slump in April was likely to be the lowest point because some key sectors are gradually reopening.

Automotive production, construction and mining are now considered essential activities and big brewers have resumed the production of beer, a big money earner both domestically and abroad.

Source: El Financiero (sp) 

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