Exports from Mexico to the US fall 3% in March, first setback in 11 months

Mexican exports of merchandise to the United States recorded a setback during the month of March, reporting a 3 percent annual drop, according to figures from the US Census Bureau. This contraction in Mexican shipments is the first in at least 11 months, since in April 2023 the statistics also showed a year-on-year drop of 2 percent.

In monetary terms, Mexican exports to the neighboring country to the north reached an amount of 41,562 million dollars in the third month of the year, which represented a decrease compared to the same period of the previous year.

However, despite the drop in March, in the accumulated value of the first quarter, Merchandise shipments from Mexico experienced moderate growthtotaling 119,849 million dollars, an increase of 3.7 percent compared to the first quarter of 2023.

On the import side, Mexico also reported a contraction of 8.1 percent in purchases of merchandise from the United States in March, registering an amount of 26.9 billion dollars. After this drop, in the accumulated of the first quarter, US merchandise shipments to Mexico fell 1.2 percent compared to the first three months of 2023.

Despite the weakness in bilateral trade during the month of March, Mexico remained the main trading partner of the United States between January and March of this year, as well as the main supplier of merchandise in that period.

And how is US economic growth going?

The economic activity of the United States could not begin with the strength that was planned, because during the first quarter of 2024 showed a notable slowdown.

Between January and March, GDP had a growth of 1.6 percent at an annualized quarterly ratea level lower than the 2.5 percent that was expected by the market, according to the first estimate of the Bureau of Economic Analysis (BEA, in English).

In addition, the slowdown observed was from 3.4 percent at an annualized quarterly rate at the end of 2023, which is the lowest level since it contracted 0.6 percent at a quarterly rate in the second quarter of 2022.

“The slowdown in real GDP in the first quarter primarily reflected slowdowns in consumer spending, exports, and state and local government spending and a federal government stagnation,” the BEA explained.

For its part, the Pantheon Macroeconomics consultancy suggested that the slow increase in the first quarter probably sets the tone for the challenge of 2024.

“It is true that forward-looking data is often revised significantly, and part of the downward surprise relative to consensus was driven by the volatile components of trade and inventories,” the financial institution mentioned.