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The manufacturing industry in the United States grew 1.4% monthly in July and reached the highest level since January 2019.


The report is influenced by a monthly advance of 11.2% in the automotive industry, 1.9% in machinery and aerospace, 2.3% in electrical and 1.1% in computers and electronics. These goods are among the most important for Mexican exports.


However, the automotive industry is 3.63% below the levels of January this year and 10.9% below December 2018. The shortage of semiconductors impacts this industry in a particular way.


The sale of cars in the US has been at a minimum since July 2020. Although the shortage of cars in dealers is a brake on sales, the behavior of demand will have to be followed as government stimuli are reduced, and given the reduction in personal savings that had been achieved in previous months.


The challenges ahead for manufacturing center on overcoming supply constraints, ranging from chip shortages, ocean freight delays, and skilled personnel shortages. And on the demand side, a more cautious consumer who must rationalize their spending in the face of the inflationary upswing.

According to the opportune indicator of economic activity (IOAE), the economy advanced 0.26% monthly in June, led by the tertiary sector (commerce and services) that grew 0.35%. The IOAE reading assumes that the industrial sector has contracted 0.69%.


However, implicitly the second quarter would have grown 1.94% quarterly and in annualized terms 8%, led by the services sector, which had a quarterly advance of 2.56% or 10.6% annualized.


It should be remembered that the GDP data does not necessarily coincide with the IOAE, but it does give a good sign of the rises and falls.


The weakness is located in the secondary sector that stagnates in the second quarter. In fact, the indicator has lagged since December last year, affected by disruptions in supply chains.


For the second semester it is foreseeable that the factor of the third wave will impact the dynamics of the economy. The services sector is vulnerable to mandatory and voluntary restrictions on mobility, which impact the capacity of establishments.


Uncertainty persists about the industrial sector and the restrictions it faces in supply chains, both in critical inputs for some industries and in shipping delays between Asia and America.


However, we are optimistic about the outlook for the export sector, given the strong demand in the US and the shortage of personnel north of the Bravo.


In any case, considering the levels of economic activity reached in the second quarter of this year, it is difficult for us to see such spectacular GDP growth in the second half.

According to government data, new infections amount to 12,821 daily cases, which confirms the third wave of the pandemic that our country is going through. Levels exceed even what was reached in the first wave. However, daily deaths have decreased, from an average of 600 daily in the first wave to 233 according to the latest recent data. The vaccination strategy that has focused on the elderly allows a reduction in mortality. New cases are now focused on the young population, mainly between 20-39 years old, although cases in children have also increased. The lower fatality in these segments of the population means that deaths have not risen so much in recent weeks, in relation to daily cases. The contagions are triggered in Baja California Sur, Campeche, Guerrero, Nayarit, Quintana Roo, Sinaloa, Veracruz and Yucatán and rebound considerably in CDMX, Colima, Edomex, Jalisco, Nuevo León, Oaxaca, Tabasco and Tamaulipas. The first states are characterized by being tourist destinations. So far there have been no severe restrictions on business. People mobility indicators show certain stagnation, but they do not show significant reductions as in the first and second waves, which suggests that the population is taking reductions, either due to the perception of lower fatality or due to confidence in the effectiveness of the measures. vaccines. It is worth mentioning that important spikes in infections have also occurred in countries such as the United Kingdom, where vaccination already reaches the majority of the population. As in Mexico, deaths have not rebounded at the rate of new infections. We cannot rule out that there is also a lag factor between new cases of infection and hospitalizations and deaths. The next few weeks will be key to validating the effectiveness of the vaccines, without forgetting that only 16% of the population has received two doses.

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