Mexico factory output dips 1.4pc in December

Spanish Market: Metals, Natural gas, Oil products
12/02/25

Mexico's industrial production fell 1.4pc in December from the previous month with broad weakness across multiple sectors on tariff uncertainty and weak domestic demand.

The result marks the largest monthly decline of 2024 and was weaker than the 1pc decline forecast by Mexican bank Banorte. It followed a nearly flat reading in November.

Trade uncertainty and low domestic demand weighed on industrial production in December, said Banorte, with industry "sluggishness" likely through mid-2025.

Manufacturing, which represents 63pc of Inegi's seasonally adjusted industrial activity indicator (IMAI), decreased by 1.2pc after rising 0.7pc in November.

Transportation equipment manufacturing output, which comprises 24pc of the manufacturing component, has fluctuated in recent months, falling 6.4pc in December after a 3.6pc uptick in November and a 4.4pc decline in October.

Despite this, Mexico's auto sector achieved record annual light vehicle production and exports in 2024. However, Mexican auto industry associations confirm investment in the sector has begun to slow on uncertainty tied to concerns over potential US tariffs and slow economic growth in 2025.

Taking the base case that tariffs do not materialize, Banorte expects manufacturing to rebound in the second half of the year as uncertainty lifts and interest rates fall with rate cuts at the central bank.

Mining, which makes up 12pc of the IMAI, was lower by 1pc in December, following a 0.5pc increase in November. The decline was again driven by the oil and gas

production, falling by 2.5pc in December to mark a sixth consecutive monthly decline for hydrocarbons output.

Construction, representing 19pc of the IMAI, contracted by 2.1pc in December with setbacks in all categories. This matched the November result, with Inegi recording declines in construction in five of the last seven months.

From a year prior, industrial production fell by 2.4pc in December , while manufacturing fell by 0.3pc and construction declined by 7.1pc in December. Mining was down by 6.2pc.

By James Young

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