Mexico’s Industrial Output Falls for Fourth Straight Month

MEXICO CITY — August 11, 2025 — Mexico’s industrial sector continued to show signs of strain in June, with overall output slipping for the fourth consecutive month, according to new data released by the National Institute of Statistics and Geography (INEGI).

Industrial activity — covering manufacturing, mining, construction, and electricity/water/gas services — fell 0.1% in June compared to May, ending a brief rebound earlier in the year. In annual terms, activity was down 0.8%, with the first half of 2025 registering a 1.3% year-over-year drop, the sharpest for a January-to-June period since the pandemic year of 2020.

Trade Uncertainty and Sectoral Declines

The ongoing slowdown comes amid uncertainty over trade relations with the United States, which recently imposed new tariffs on several Mexican exports. Analysts say the new duties have hit industrial confidence, particularly in manufacturing sectors tied to export demand.

June saw notable declines across key segments:

• Mining output fell 1.4% month-over-month and 8.5% year-over-year.
• Construction activity dipped 0.2% in June, but rose 1.5% annually, making it the only industrial sector to show year-over-year growth.
• Electricity, water, and gas supply contracted 0.2% in June and 3.8% annually.

Manufacturing was the sole bright spot in June’s monthly comparison, posting a 0.3% gain, though annual growth was flat at 0.0%.

President Sheinbaum Remains Optimistic

Despite the string of declines, President Claudia Sheinbaum has voiced confidence that activity will pick up in the second half of the year. She pointed to upcoming public works programs — including new railroad lines, housing projects, and infrastructure upgrades — as potential catalysts for a construction sector rebound.

First-Half Performance: Weakest Since COVID

The 1.3% decline in industrial output for January through June is the first for that period since 2020, when pandemic shutdowns caused a 13.6% contraction. The drop is even larger than the 1.1% decline in 2019, which was partly attributed to the controversial cancellation of the Mexico City Texcoco airport project under then-President López Obrador.

Mining suffered the heaviest blow in the first half of 2025, with an 8.8% annual decline. The electricity/water/gas sector shrank 2.1%, and construction fell 1.1% overall, driven by a 24.6% plunge in civil engineering activity due to reduced public works spending.

Manufacturing eked out a 0.1% increase, though 13 of 21 sub-sectors — including the automotive industry — saw declines. Sectors facing import competition from Asia, such as wood products and clothing, also posted losses. Gains were recorded in food production, computer equipment, and household appliances.

Broader Economic Context

• GDP growth in Q2 2025 was 0.7% quarter-over-quarter and 1.2% year-over-year (seasonally adjusted).
• The peso traded at 18.67 per U.S. dollar Monday afternoon.
• The Bank of Mexico recently cut its benchmark rate by 25 basis points to 7.75%.
• Formal job creation surged in July, with 1.26 million positions added, bolstered by a pilot program extending benefits to digital platform workers.

Economists warn that unless external demand improves and public infrastructure spending ramps up quickly, industrial output could remain sluggish for the rest of the year.

Originally reported by MND Staff in Mexico News Daily.