Mexico industrial output tepid in June

Aug 14, 2007 - Industrial production in Mexico, pinched by a U.S. economic slowdown, rose a tepid 0.1 percent in June compared with the year-ago period, its weakest growth since March.

Industrial output in Mexico was 0.91 percent higher in June than in May, the government said on Tuesday.

Economists polled by Reuters on average had expected 1.7 percent growth, year over year.

Manufacturing, a cornerstone of Mexico's economy, fell 0.30 percent in June over the year-ago period, the government said.

Queretaro-based Tafime Mexico, which makes parts for the U.S. auto industry, has seen its billing fall by half in the past two months and is trying to avoid laying off some of its 135 employees.

"I'm working on preventive maintenance, repairs," general manager Hector Ortiz told Reuters. "If I had 10 machines working, now I have three working."

A slowdown in the United States, which buys almost all of Mexico's exports, is seen reducing Mexican growth to 3.6 percent this year from 4.8 percent in 2006.

The economy is expected to grow only 2.8 percent in the second quarter, according to a Reuters poll of analysts

"June's Mexican industrial production data suggests the economy could pick up less quickly and with greater difficulty than originally expected," Mexico City-based Ixe brokerage said in a report.

The government said mining rose 1.9 percent, of which non-oil production rose 3.7 percent and oil output increased 0.30 percent.

Construction gained 1.1 percent, while utilities rose 2.1 percent, the government said.

Last week, Mexican automakers cut their growth forecasts for production and exports to up to 15 percent from up to 25 percent.