Is it any wonder that remittances are still falling?

In the first two months of this year, remittances were 14.9% less than in the first two months of 2009. It's not surprising when you consider that a fifth of the Mexicans working in the US in the last quarter of 2008 (the latest data available from Banxico) had construction jobs.

Vehicle production accelerates Mexico's recovery

In the first quarter of this year, total production in Mexico averaged 174,147 vehicles a month, just 0.6% below 2008's record levels. The vehicle production figures make it very clear that exports are behind Mexico's stronger than expected recovery. Production of vehicles for export averaged 144,574 a month, 4.2% above 2008 levels; average monthly production for the domestic market was 14.7% less than in 2008.

Before the crash, exports drove the growth of vehicle production. In 2005, production for export accounted for 74.3% of total vehicle production. That percentage has grown steadily. Even last year when vehicle exports plunged 26.3%, exports' share of total vehicle production rose 2.2 percentage points, to 81.4%. In the first quarter of this year, exports' share was 83.0% of total vehicle production.

As goes the US, so goes Mexico?

The NBER, the official dater of when US recessions begin and end, met today. Pre-meeting leaks said that the group of economists will hold off declaring that the US recession is over. Yes, GDP has grown for at least two quarters, but other measures, like employment and consumer confidence, aren't looking so good.
What does this mean for Mexico? It's a reminder that the growth rate of US industrial production matters more to Mexico than the growth of US GDP. Fortunately for Mexico, the US industrial production index hit bottom last June and has grown every month since. Even so, the February industrial production index was still below its December 2008 level. In Mexico, industrial production began to rose (versus the previous month) September - December, dipped in January, and rose 0.59% in February, a month in which US industrial production rose 0.1%.