BMI remains optimistic toward Mexico's long-term growth outlook on the back of a booming manufacturing sector, an increasingly strong private consumer and favourable demographics. As a result, we retain a cautious optimism towards the country's shipping sector. Nevertheless, we have revised down our 2014 real GDP growth forecast to 3.1% from 3.3%, compared to growth of 1.1% in 2014, due to weak private consumption growth in Q114.
Following ongoing contractions in the construction sector and a slump in manufactured goods export growth in late 2013 and early 2014 due to weather-related disruptions to production, we expect economic activity to re-accelerate in the coming months. Stronger public investment into infrastructure, after a government transition last year resulted in spending delays, will ensure the construction sector recovers from the contraction it experienced in 2013.
Ongoing signs of stronger US consumption bode well for Mexico's manufacturing sector and we expect manufactured goods, especially those related to the autos segment, to pick up in the coming quarters. An improvement in construction and manufacturing will bolster labour dynamics, which underpin our expectations for private consumption growth to accelerate both in 2014 and 2015.
Headline Industry Data
Port of Manzanillo total tonnage growth in 2014 forecast to be 6.2%, reaching 30.5mn tonnes.
Port of Veracruz total tonnage growth in 2014 forecast to be 8.6%, reaching 21.0mn tonnes.
Mexico trade real growth forecast at 5.5% in 2014.
Key Trends And Developments
Hutchison's Lazaro Cardenas Expansion Complete: The USD225mn second phase expansion project of Mexico's Lazaro Cardenas Container Terminal (LCT) is complete with the delivery of two new STS Super Post-Panamax cranes and five additional gantry (RTG) cranes.
Mexico To Double Port Capacity Within Six Years: Port infrastructure in Mexico is to double in capacity over the next six years, according to Ricardo Martínez of...