Embed Size (px)
Citation preview
Regional Economic Report July – September 2013
December 11, 2013
I. Introduction
II. Results July – September 2013
A. Economic Activity
B. Inflation
C. Economic Outlook
III. Final Considerations
Outline
I. Introduction
II. Results July – September 2013
A. Economic Activity
B. Inflation
C. Economic Outlook
III. Final Considerations
Outline
Introduction
• The Regional Economic Report is a quarterly publication on the recent trends in economic activity, inflation and business agents’ expectations in the Mexican regions.1/
• This information is taken into account by Banco de México’s Board of Governors when evaluating the economic situation and the forecast for the Mexican economy.
• The economic performance of the regions in 3Q 2013 and the prospects for regional economic activity and inflation over the following 6 and 12 months are analyzed herein.
4
1/ For the purposes of this Report, the federal entities of Mexico are grouped into the following regions. Northern: Baja California, Chihuahua, Coahuila, Nuevo León, Sonora and Tamaulipas. North-Central: Aguascalientes, Baja California Sur, Colima, Durango, Jalisco, Michoacán, Nayarit, San Luis Potosí, Sinaloa and Zacatecas. Central: Distrito Federal, Estado de México, Guanajuato, Hidalgo, Morelos, Puebla, Querétaro and Tlaxcala. Southern: Campeche, Chiapas, Guerrero, Oaxaca, Quintana Roo, Tabasco, Veracruz and Yucatán.
I. Introduction
II. Results July – September 2013
A. Economic Activity
B. Inflation
C. Economic Outlook
III. Final Considerations
Outline
• Economic activity in all regional economies observed an incipient recovery in 3Q 2013.
This recovery is mainly associated to the dynamism of the manufacturing sector, which responded to a better performance of external demand.
Tourism and funding to firms expanded, while the number of IMSS-insured workers kept growing.
In contrast, sales’ and construction indicators in most regional economies still do not present clear signs of recovery.
The hurricanes “Ingrid” and “Manuel” moderately affected the economic activity, primarily in the agricultural sector which presented a differentiated performance by region.
6
Economic Activity
7
Economic Activity Regional Coincident Index 1/
Quarterly change in percent, s.a.
1/ This indicator’s values in 3Q 2013 are a forecast. Source: Estimated by Banco de México with data from IMSS and INEGI.
8
Economic Activity Regional Manufacturing Indicator 1/
Quarterly change in percent, s.a.
1/ This indicator’s values in 3Q 2013 are a forecast. Source: Estimated by Banco de México with data from INEGI.
• Business agents of different economic sectors interviewed by Banco de México for this Report pointed out, especially in the Northern, North-Central and Central regions, the link between the performance of the automobile industry and that of their respective region.
• To deepen the comprehension of this relation, a Box of this Report presents a study of the pattern of this industry’s regional development.
• In particular, it analyzes the hypothesis that this pattern is characterized by the geographic concentration of the economic activity in the automobile sector.
9
Box: Formation of Regional Clusters in the Mexican Automobile Sector
• The analysis shows that the automobile sector is characterized by its geographic concentration and that it has managed to consolidate the formation of clusters.
This allows the sector’s firms to take advantage of agglomeration economies and to reduce their production costs.
Thus, the new investment projects, announced in the automobile industry for the next years, are located in the geographical area of influence of some car manufacturing plants of the country.
• The favorable evolution of the automobile sector, despite the slowdown in external demand during the previous quarters, indicates that fostering agglomeration economies and, therefore, increasing productivity contributes to making regional economies more resilient to economy-wide shocks.
• According to the interviewed business agents of the automobile sector, public policies fostering the development of human capital and the provision of infrastructure in their regions are key elements in supporting the formation of clusters.
10
Box: Formation of Regional Clusters in the Mexican Automobile Sector
Geographic Distribution of Automobile Industry Production Units
11
Source: Prepared by Banco de México based on data from INEGI and the Ministry of Economics.
Vehículos ligeros
Vehículos pesados
Vehículos ligeros y pesados
Autopartes
Zona de influencia: 300 km
Vehículos ligeros
Vehículos pesados
Vehículos ligeros y pesados
Autopartes
Zona de influencia: 300 km
Light vehicles
Heavy vehicles
Light and heavy vehicles
Car parts
Area of influence: 300 km
Box: Formation of Regional Clusters in the Mexican Automobile Sector
Geographic Distribution of Investment Projects in the Automobile Sector
Announced in 2013
New investments
Area of influence: 300 km
12
Hotel Occupancy Inflow of Passengers to Airports
Regional Indicators of Activity in the Tourism Sector
Annual change in percent
Economic Activity
Source: Estimated by Banco de México with data from the Mexican Secretariat of Tourism and from Airports and Auxiliary Services (ASA, for its acronym in Spanish).
13
Main Sources of Financing to Firms Diffusion index
Co
ntr
acti
on
Ex
pan
sio
n
Source: Banco de México.
Own Resources Suppliers Commercial Banks
Economic Activity
58 57 59
55 57 56 56 53
0
10
20
30
40
50
60
70
80
90
Northern North-Central Central Southern
IIQ 2
01
3
IIIQ
20
13
IIQ 2
01
3
IIIQ
20
13
IIQ 2
01
3
IIIQ
20
13
IIQ 2
01
3
IIIQ
20
13
61
56 56 59
56
62
55 55
0
10
20
30
40
50
60
70
80
90
Northern North-Central Central Southern
IIQ 2
01
3
IIIQ
20
13
IIQ 2
01
3
IIIQ
20
13
IIQ 2
01
3
IIIQ
20
13
IIQ 2
01
3
IIIQ
20
13
54 55 55 53 55 56 52 51
0
10
20
30
40
50
60
70
80
90
Northern North-Central Central Southern
IIQ
20
13
IIIQ
20
13
IIQ
20
13
IIIQ
20
13
IIQ
20
13
IIIQ
20
13
IIQ
20
13
IIIQ
20
13
14
Economic Activity Number of IMSS-insured Workers
Quarterly change in percent, s.a.
Source: Estimated by Banco de México with data from IMSS.
15
Economic Activity Regional Retail Sales Indicator
Quarterly change in percent, s.a.
Source: Estimated by Banco de México with data from INEGI.
16
Source: Estimated by Banco de México with data from INEGI.
Real Value of Production in the Construction Industry by Region
Index, base 2Q 2008 = 100, quarterly average, s.a.
Total Public Private
Economic Activity
60
70
80
90
100
110
120
130
140
150
160
I 2006
III I2007
III I2008
III I2009
III I2010
III I2011
III I2012
III I2013
III
Northern North-Central
Central Southern
60
70
80
90
100
110
120
130
140
150
160
I 2006
III I2007
III I2008
III I2009
III I2010
III I2011
III I2012
III I2013
III
Northern North-Central
Central Southern
60
70
80
90
100
110
120
130
140
150
160
I 2006
III I2007
III I2008
III I2009
III I2010
III I2011
III I2012
III I2013
III
Northern North-Central
Central Southern
17
Economic Activity Regional Agricultural Production Index
Annual change in percent
Source: Estimated by Banco de México with data from SAGARPA.
1.1
-15.8
5.2
1.6
16.0
12.1
35.1
3.4 1.4
6.9
13.5
2.6
-13.4
-3.1
5.3 7.8
0.8
-3.1
4.3
-0.7
Northern North-Central Central Southern
3Q 4Q 1Q 2Q 3Q ' 2012 2013
3Q 4Q 1Q 2Q 3Q ' 2012 2013
3Q 4Q 1Q 2Q 3Q ' 2012 2013
3Q 4Q 1Q 2Q 3Q ' 2012 2013
• By the end of the analyzed quarter, the economic activity in Mexico was altered by the simultaneous impact of the hurricanes “Ingrid” and “Manuel”.
These caused floods in urban and rural areas and affected the infrastructure of transport and certain services.
Agriculture was the most severely affected, while tourism, transport and commerce also observed a certain impact.
Still, the economic activity was only disrupted locally in some states and municipalities of the Southern, North-Central and Northern regions.
o With regard to agriculture, the most severe impact was registered
in the states with a small share of Mexican agricultural production.
Thus, the impact to the national economy was moderate.
18
Box: Impact of the Hurricanes “Ingrid” and “Manuel” on Regional Economies
19
Agricultural Production: Average from 2006 to 2012
Data in percent
Fruit and Vegetables Price Index: Acapulco
Change per fortnight in percent
Box: Impact of the Hurricanes “Ingrid” and “Manuel” on Regional Economies
Affected Agricultural Area by Federal Entity
Share of area cultivated in 2012
Source: Estimated by Banco de México with data from SIAP-SAGARPA.
Source: Estimated by Banco de México with data from SIAP-SAGARPA.
Contribution to the Value of the National Agricultural Production
Months of low production
Source: Estimated by Banco de México with data from INEGI and Banco de México.
92
.1
96
.5
98
.1
99
.0
99
.2
99
.4
99
.5
99
.99
99
.2
98
.7
7.9
3.5
1.9
1.0
0.8
0.6
0.5
0.0
1
0.8
1.3
0
10
20
30
40
50
60
70
80
90
100
Gu
err
ero
(2
.7%
)
Mic
ho
acán
(9
.9%
)
Oax
aca
(3.3
%)
Tam
aulip
as (
4.5
%)
Ve
racr
uz
(7.8
%)
Sin
alo
a (8
.7%
)
Zaca
teca
s (3
.0%
)
Co
lima
(1.0
%)
Otr
os
Edo
s. (
59
.1%
)
Nat
ion
al (
10
0%
)
Unaffected Affected
16.0
8.7
10.2
9.1
10.5
8.2
5.4 4.7 4.9
6.0
9.3
6.9
0
2
4
6
8
10
12
14
16
18
Jan
Feb
Mar
Ap
r
May Jun
Jul
Au
g
Sep
Oct
No
v
Dec
3.10
1.35
-1.14
2.21
4.25
-5.87
-8.0
-6.0
-4.0
-2.0
0.0
2.0
4.0
6.0
1fortn.Sept.
2fortn.Sept.
1fortn.Oct.
Average 2009-2012 2013
20
Business Contacts’ Opinion: Degree of Impact in their Entity by the Hurricanes “Ingrid” and “Manuel”
Percentage of mentions
Box: Impact of the Hurricanes “Ingrid” and “Manuel” on Regional Economies
Source: Banco de México.
Very severe Severe Medium Low None
47.53
29.70
66.27
37.23
29.63
33.66
21.69
43.07
17.90
25.74
8.43
9.49
3.70 7.92
3.61
2.92
1.23 2.97 7.30
0
10
20
30
40
50
60
70
80
90
100
Northern North-Central Central Southern
• In 3Q 2013, annual headline inflation in all regional economies maintained a downward trend.
• This was contributed to by a favorable performance of both the core and non-core component.
The downside trajectory of annual core inflation resulted from a lower inflation of the merchandise subindex and from the low level at which the inflation of the services’ subindex persisted in all regional economies.
In turn, the reduction of annual non-core inflation was motivated by the fading of the shocks in the agricultural products’ prices at the end of 1Q 2013, with this drop more pronounced in the Southern region.
21
Inflation
22
Source: Estimated by Banco de México with data from INEGI and from Banco de México.
Annual Headline Inflation Data in percent
1
2
3
4
5
6
7
8
J2009
M M J S N J2010
M M J S N J2011
M M J S N J2012
M M J S N J2013
M M J S N
Northern North-Central Central Southern National
23
Annual Inflation
Core Non-core
Data in percent
Source: Estimated by Banco de México with data from INEGI and from Banco de México.
0
1
2
3
4
5
6
7
J2009
M S J2010
M S J2011
M S J2012
M S J2013
M S N
Northern North-CentralCentral SouthernNational
0
2
4
6
8
10
12
14
J2009
M S J2010
M S J2011
M S J2012
M S J2013
M S N
Northern North-CentralCentral SouthernNational
• The business contacts interviewed by Banco de México for this Report generally stated that in all regional economies a further recovery of the demand for own products and services over the following 6 and 12 months is anticipated. This expectation is principally based on two factors:
The reactivation of domestic demand, derived from a greater
dynamism of public expenditure on infrastructure.
The impulse of external demand, particularly in the U.S., so the
economic growth is anticipated to continue moderate.
• As a consequence, the interviewed business agents expect to increase their demand for personnel and the physical capital stock.
24
Economic Outlook
• According to the interviewed business contacts, among the main downward risks to the economic activity in their regions, the following factors stand out:
External factors
The expansion rate of the U.S. economy.
New volatility episodes in international financial markets.
Domestic factors
A smaller than foreseen impulse generated by the structural reforms.
The persistence of the weak private construction for a longer than anticipated period.
Deterioration in perceived public safety and the occurrence of adverse weather phenomena.
25
Economic Outlook
• Finally, regarding inflation expectations, the interviewed business agents revealed that no inflationary pressures on input prices, salary costs and sales’ prices are anticipated over the following 6 and 12 months.
• Additionally, they expect the effect of the fiscal modifications on inflation to be transitory and moderate in their respective regions in 2014.
26
Economic Outlook
27
Co
ntr
acti
on
Ex
pan
sio
n
Economic Outlook Demand as Expected by Business Agents 1/
Diffusion index
Personnel Hired as Expected by Business Agents 2/
Diffusion index
1/ Results obtained from responses to the question: “With respect to the situation in 3Q 2013, how do you expect the demand for your own products and services to change over the next 6 and 12 months?”, from the interviews conducted by Banco de México between September 24 and October 25, 2013.
Source: Banco de México.
2/ Results obtained from responses to the question: “With respect to the situation in 3Q 2013, how do you expect the personnel hired by your firm to modify over the next 6 and 12 months?”, from the interviews conducted by Banco de México between September 24 and October 25, 2013.
Source: Banco de México.
63.4
71.8
60.8
79.6 78.5 77.3 71.6
81.5
0
10
20
30
40
50
60
70
80
90
100
Northern North-Central Central Southern
Ne
xt 6
mo
nth
s
Ne
xt 1
2 m
on
ths
Ne
xt 6
mo
nth
s
Ne
xt 1
2 m
on
ths
Ne
xt 6
mo
nth
s
Ne
xt 1
2 m
on
ths
Ne
xt 6
mo
nth
s
Nex
t 1
2 m
on
ths
56.2
64.9
53.1 58.5
72.0 77.2
74.0
66.8
0
10
20
30
40
50
60
70
80
90
100
Northern North-Central Central SouthernN
ext
6 m
on
ths
Nex
t 1
2 m
on
ths
Nex
t 6
mo
nth
s
Nex
t 1
2 m
on
ths
Nex
t 6
mo
nth
s
Ne
xt 1
2 m
on
ths
Nex
t 6
mo
nth
s
Nex
t 1
2 m
on
ths
28
Economic Outlook Physical Capital Stock as Expected by Business Agents for the Next 12 Months 1/
Diffusion index
Co
ntr
acti
on
Ex
pan
sio
n
1/ Results obtained from responses to the question: “With respect to the situation in 3Q 2013, how do you expect your firm’s physical capital stock to change over the next 12 months?”, from the interviews conducted by Banco de México between September 24 and October 25, 2013.
Source: Banco de México.
64.6 63.9 61.0 60.9
0
25
50
75
100
Northern North-Central Central Southern
29
Economic Outlook Business Agents’ Inflation Expectation, Next 6 Months 1/
Diffusion index
Dec
reas
e
Incr
ease
Commodity Price Increase Labor Cost Increase Own Products’ Price Increase
1/ Results obtained from responses to the questions: “With respect to the situation in 3Q 2013, do you expect any adjustment in commodity prices, labor costs and own products and services’ prices over the next 6 months?”, and “In comparison with the same period of last year, what magnitude of adjustment do you expect? Greater, same or lower?”, from the interviews conducted by Banco de México between September 24 and October 25, 2013.
Source: Banco de México.
38.3
32.0
39.2 41.2
0
25
50
75
100
Northern North-Central Central Southern
27.8 33.7
35.6
31.2
0
25
50
75
100
Northern North-Central Central Southern
23.8
17.0 20.9
38.8
0
25
50
75
100
Northern North-Central Central Southern
30
Economic Outlook Business Agents’ Inflation Expectation, Next 12 Months 1/
Diffusion index
Dec
reas
e
Incr
ease
Commodity Price Increase Labor Cost Increase Own Products’ Price Increase
1/ Results obtained from responses to the questions: “With respect to the situation in 3Q 2013, do you expect any adjustment in commodity prices, labor costs and own products and services’ prices over the next 12 months?”, and “In comparison with the same period of last year, what magnitude of adjustment do you expect? Greater, same or lower?”, from the interviews conducted by Banco de México between September 24 and October 25, 2013.
Source: Banco de México.
32.8
25.0
35.0 37.5
0
25
50
75
100
Northern North-Central Central Southern
42.8 42.7 42.6
35.1
0
25
50
75
100
Northern North-Central Central Southern
24.7
16.7
23.4
44.2
0
25
50
75
100
Northern North-Central Central Southern
I. Introduction
II. Results July – September 2013
A. Economic Activity
B. Inflation
C. Economic Outlook
III. Final Considerations
Outline
Final Considerations Based on the analysis of the regional economic data and the business agents’ opinions, the following stands out:
Economic activity observed an incipient recovery in all regional economies in 3Q 2013.
Annual headline inflation maintained a downward trend in 3Q 2013. In particular, it is noteworthy that core inflation registered minimum historical values.
Business agents interviewed by Banco de México for this Report anticipate a further recovery of the economic activity in their respective regions over the following 6 and 12 months.
As regards inflation expectations, business contacts anticipate no significant inflationary pressures in all regions in the referred time span.
32
December 2013
