Mexico’s economy showed modest resilience in October, with national economic activity rising 1.6% year-on-year, according to preliminary data from the National Institute of Statistics and Geography (INEGI). The increase was led by a strong rebound in the primary sector—agriculture, forestry, and fishing—which expanded 5.1% compared to the same month last year.
The services sector also contributed to the overall gain, growing 2.5% annually as domestic consumption continued its steady post-pandemic recovery. In contrast, industrial activity remained flat, reflecting ongoing weakness in construction and manufacturing. The divergence underscores persistent structural imbalances in Mexico’s economy.
On a monthly basis, economic activity edged up just 0.1% from September. Services rose 0.3%, while industrial output slipped by 0.1%. The primary sector contracted 2.4% month-on-month, likely due to seasonal factors following a strong performance in September.
The uneven sectoral performance highlights structural imbalances in Mexico’s economy.
The IGAE (Indicador Global de la Actividad Económica), a key short-term proxy for gross domestic product, suggests that while headline growth remains positive, momentum is uneven across sectors. The strength in agriculture and services has helped offset industrial stagnation, but analysts caution that the primary sector’s volatility—driven by weather patterns and commodity prices—limits its reliability as a long-term growth engine.
Despite these headwinds, full-year GDP growth for 2023 is expected to exceed 3%, supported by resilient domestic demand and favorable base effects. However, economists anticipate a slowdown in early 2024 amid global uncertainty and cautious investment behavior ahead of national elections.
The flat performance of industry remains a concern for medium-term prospects. Construction and manufacturing—two pillars of industrial output—have struggled to regain momentum amid high interest rates and weak external demand. Without a broader recovery in these areas, sustained economic acceleration may prove elusive.
October’s data offer a mixed picture: encouraging signs from agriculture and services suggest some underlying strength, but the lack of industrial dynamism continues to weigh on overall potential.
