Mexico Industrial Output Weakens, But Beats Gloomy Forecasts

Mexico’s industrial production contracted 0.8% year-on-year, a deeper decline than the previous month’s 0.3% drop. The fall widened by 0.5 percentage points, signaling a clear deterioration in industrial activity compared with the prior reading.

However, the result was better than analysts’ forecast of a 1.2% decline, limiting downside surprise and softening immediate market pessimism. Equity investors are likely to view the data as mildly negative for cyclical and industrial stocks, given the worsening trend, but less severe than feared. The report also reinforces a subdued growth outlook, which tends to support defensive sectors and rate-sensitive names as markets reassess longer-term policy expectations and growth prospects.