MEXICO CITY: Mexican industrial output fell more than expected in October as construction and manufacturing faltered amid weak activity in the United States, the destination for most of Mexico's exports.
Industrial production fell 0.54 percent in October from September, the national statistics agency said on Monday. Analysts had expected a 0.10 percent fall after a strong increase in September.
The weakness was due to a dip in manufacturing, where output fell 0.4 percent month-on-month, and a 2.45 percent drop in construction, the biggest fall in more than two years.
Slower US growth also drags down growth in Mexico, which is slowly recovering from a deep recession in 2009 and sends nearly 80 percent of its exports to its northern neighbour.
Mexico's central bank has kept rates on hold at 4.5 percent since mid-2009 and has said the balance of risks to growth continues to deteriorate, although markets are pricing in only a low chance of a rate cut next year.
Bank of Mexico board member Manuel Sanchez said on Friday manufacturing production would probably remain weak in the fourth quarter, given the almost instantaneous knock-on impact from the United States.
U.S consumer spending barely rose in October and the pace of growth in manufacturing slowed, although a rebound in the United States in November may help support Mexican activity towards the end of the year.
Compared with the same month last year, industrial output was up 3.3 percent in October, from a 3.6 rise the month before. Analysts had expected a 3.7 percent increase.
September's month-on-month increase was revised down to 1.32 percent from the originally reported 1.75 percent.
Separate figures showed gross fixed investment a measure of spending on machinery, equipment and new construction recovered in September to rise 0.16 percent.
Gross fixed investment was up 6.8 percent compared to the same month last year.
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