The wage bill in Mexico decreased in June, although it is already above February 2020 levels, highlighted the IMEF in its monthly leading indicators report.
On the other hand, remittances remain strong at levels well above pre-pandemic levels.
This has been reflected in the increase in retail sales, which showed growth in June and July, as well as in imports of consumer goods in recent months.
According to the IMEF, the increase in sales and consumer imports would seem to be in the opposite direction to that of the IGAE‘s performance during June, which fell 0.3 percent.
However, the IMEF added, within the IGAE, tertiary activities did not show a drop in June; rather, they remained unchanged, although the IOAE predicts a drop for July that could result from the effect of the current inflation and its impact on consumption and consumer confidence.
Meanwhile, within the fall in gross fixed investment in May, reductions were observed in investment in machinery and equipment, as well as in residential construction, components strongly linked to secondary activities and which are important sources of higher employment.
“And in the same tenor we can observe the other source of economic expansion for secondary activities, that is, merchandise exports which, although they increased in June, that trend reversed in July with a 0.26% drop,” added the IMEF.
Within the most representative exports, manufacturing exports (87% of the total) increased in June, but fell in July by 0.92%, within which automotive exports had a decrease of 4.22% in July.
The above seems to point to a differential in the behavior of secondary and tertiary activities within the IGAE for June and the IOAE for July, with secondary activities being less dynamic than tertiary activities.
Indeed, retail sales and ANTAD sales have shown growth in June and July, while BPI data and its components, closely linked to secondary activities, have shown declines in May, as well as manufacturing exports in July, which may explain the deterioration expected by the IOAE in the dynamism of secondary activities.
The Timely Activity Indicator forecasts declines in both types of activities, but more pronounced in secondary activities.
“This appears as a kind of chiaroscuro in the behavior of the different components of economic activity,” said the IMEF.