By Anthony Harrup / Wall Sreet Journal
The Mexican economy contracted in the second quarter, marking its first decline in three years, as industrial production fell and services remained unchanged from the previous period.
Gross domestic product, a broad measure of output in goods and services, fell 0.3 percent seasonally adjusted from the first quarter. The contraction, which translates into an annualized drop of 1.2 percent, was the country’s first since the second quarter of 2013.
Compared with the second quarter of 2015, Mexico’s GDP expanded 2.4 percent, which was above the 2.2 percent median estimate of 12 economists polled by The Wall Street Journal, but down from 2.6 percent in the first quarter.
Industrial production fell 1.7 percent from the first quarter, agricultural output slipped 0.1 percent and services were flat.
Services have been the main driver of growth for at least a year, due to wage and employment gains, as well as low inflation.
Industrial production, however, has been held back in part by weakness in manufacturing exports tied to a sluggish performance in the U.S. manufacturing sector. Government budget cuts resulting from lower oil revenue are weighing on areas such as construction.