MEXICO CITY: Mexican industrial production rose less than expected in November in a sign that slow US growth could be weighing on Mexico's economy.
Industrial output in Latin America's second-largest economy rose 0.1 percent in November from October, the national statistics agency said on Wednesday. Analysts had expected a 0.5 percent rise after a 0.5 percent slump in October.
Eduardo Gonzalez, an economist at Banamex in Mexico City, said Mexico's economy should still manage to post growth of nearly 4 percent in 2011.
"Even though this missed expectations, it is still within a range where it should be, given the economic slowdown in Mexico," Gonzalez said. "This is really not a bad data point, given what we have seen in the United States."
Sluggish activity in the United States, Mexico's top trading partner, is expected to weigh on Mexico's economy this year when growth is seen slowing to around 3.2 percent.
A separate report showed automobile production and exports rose in December, underscoring some strength in factory output.
Yields on Mexican interest rate swaps were little changed after the data. Some investors are betting on an interest rate hike in Mexico later this year from the current 4.5 percent benchmark rate.
A spike in annual inflation to a one-year high in December stoked concerns that a weak peso could be feeding into higher consumer prices.
But some economists think slowing US growth and a deepening crisis in Europe could push Mexico to cut rates.
Despite record automobile production, the index's dominant manufacturing component expanded a slight 0.07 percent in November compared to October. Mining rose 0.42 percent.
Electricity, water and gas production fell 0.63 percent and construction dipped 0.01 percent, the agency said.
Industrial output was 3.2 percent higher year-over-year, below the 3.4 percent increase expected by analysts and down from October's 3.3 percent rise.
Mexico's auto industry association, AMIA, said vehicle output rose 5.0 percent in December versus a year ago. Automobile exports during the last month rose 16.1 percent compared to the same month last year.
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