Mexico's industrial production contracted by 0.9pc in March from the previous month, as declines in mining and manufacturing were only partly offset by continued growth in construction.
The drop was not enough to undo the 2.2pc increase in February — the sharpest monthly expansion in four years — as manufacturers ramped up output ahead of incoming US tariffs.
The March industrial production index (IMAI), published by statistics agency Inegi, was higher than Mexican bank Banorte's forecast of a 1.4pc decline. Banorte noted signs of volatility affecting manufacturing and other sectors because of a complex trade outlook.
Manufacturing contracted 1.1pc in March after expanding 2.9pc in February. The impact varied across subsectors, with metal goods down 5.5pc and transportation, including auto production, down 1.1pc.
Volatility may ease in the coming months as US tariff policies become clearer and Mexican officials push to preserve the country's trade edge under US-Mexico-Canada (USMCA) free trade agreement rules, Banorte said.
Construction expanded 0.8pc in March, following increases of 3.4pc in February and 0.5pc in January, driven by higher public investment tied to President Claudia Sheinbaum's economic plan, "Plan Mexico."
Analysts see the plan as a catalyst for continued growth in construction this year, with measures including greater domestic content in public purchases, public-private participation in infrastructure projects and a target of $100bn in private infrastructure investment for 2025. These effects could be amplified by aggressive interest rate cuts from the central bank.
Mining contracted by 2.7pc in March, returning to negative territory after a slight 0.1pc uptick in February. Oil and gas output also contracted 2.7pc after rising 1.0pc the month before, while non-oil mining contracted 4.3pc in March after a 0.6pc increase in February.
