Slowdown in industrial activity and investment casts doubt on Plan Mexico's ability to shore up the economy

"The Mexican economy has lost momentum in the second half of the year, as weak investment and industrial activity complicated the country's third quarter outlook. Preliminary figures released Tuesday by Mexico's National Institute of Statistics and Geography (INEGI) suggest that a year-over-year decline of 0.6% is to be expected in August and September. Amid tariff uncertainty with the United States, the biggest setback last month was in industrial activity, which fell 0.3% compared to the same month in 2024."

"If the decline in August and September is confirmed, the country's economic activity will have seen three consecutive months of contraction, after falling 1.2% compared to last year in July. INEGI's economic activity indicator shows tertiary and service activities growing by 0.4% at an annual rate in August and 0.8% in September, slight increases that would not be enough to balance out losses in economic activity during the third quarter of the year."

Preliminary INEGI figures indicate a year-over-year decline of about 0.6% in August and September, with industrial activity down 0.3% year-over-year in September. Weak public and private investment and declines in manufacturing and construction are weighing on growth. If August and September declines are confirmed, economic activity will mark three consecutive months of contraction after a 1.2% year-over-year fall in July. Tertiary and service activities grew modestly by 0.4% in August and 0.8% in September, insufficient to offset industrial losses. Plan Mexico aims to boost domestic production, substitute Asian imports, and deepen regional industrial integration amid tariff uncertainty with the United States.

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