Mexico remains the main trading partner of its neighboring country, but experienced a decrease partly due to the slowdown in consumption of goods by American families, which dropped from a growth of 3.3% to 2% in the last year.
The year-on-year decline of 2.9% in Mexican exports to the United States last March, reaching $41.563 billion, was partly driven by lower consumption in said country.
On the other hand, imports to Mexico from the United States also decreased by 8.1% in the same month, totaling $26.901 billion.
Nevertheless, Mexico remained the top trading partner of its northern neighbor in merchandise trade, with a 15.8% share, followed by Canada (14.8%) and China (10.7%), according to data from the Census Bureau.
Considering the entire first quarter, Mexican exports to the United States grew by 3.8%, to $115.494 billion.
On an annual basis, the average growth rate of American consumption of goods in the first quarter was 2.0%, implying a slowdown from 3.3% in the fourth quarter of 2023.
The growth of exports can accelerate again, but for this it is necessary for manufacturing production in Mexico to grow steadily, recovering from the stagnation observed in the first months of the year and for consumption to accelerate in the United States, mainly of goods, something that is not ruled out towards the second half of the year, due to the electoral process in that country
Said Banco Base in an analysis
Last March, U.S. imports of products amounted to $259.145 billion, a 1.4% decrease year-on-year.
While purchases from Canada decreased by 8.9% to $34.218 billion, those from China dropped by 2.8% to $29.941 billion.
From Banco Base’s perspective, the growth in Mexico’s total exports is supported by the expectation of U.S. economic growth close to 2.2% annually, according to a central scenario, and an acceleration in consumer spending during the second half of the year, during the electoral period in that country. Additionally, exports could find momentum in a depreciation of the peso during the second half of the year.
Outbound shipments of goods from the United States to the world experienced a year-on-year decline of 2.9% in March, reaching $179.326 billion.
Shipments from this origin to Canada decreased by 3.2% to $30.859 billion, and those directed to China fell by 9.9% to $12.772 billion, on a year-on-year basis.
The GDP of the United States increased by 0.4% in the first quarter of 2024, which is half the growth of 0.8% recorded in the last quarter of 2023.
However, according to an analysis by Invex, some components of domestic demand remain strong even as interest rates remain high. “Despite the slowdown, we maintain the expectation that the United States will not fall into a recession,” they added.
With the aforementioned results, the United States reported a deficit in the trade of goods of $79.819 billion in March. Separately, its negative balance with Canada totaled $3.360 billion, while the corresponding one with Mexico was -$14.662 billion and with China it was -$17.169 billion.
