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Latin America Outlook: Strength in Brazil and Argentina Offsets Weakness in Mexico
Automotive, machinery and equipment industries are major growth drivers, Manufacturers Alliance/MAPI reports
Arlington, VA — December 18, 2007 — While there will be some deceleration in production growth, prospects for Latin America manufacturing remain solid through 2008, according to a new report from the Manufacturers Alliance/MAPI.
The alliance's new bi-annual "Latin America Outlook: 2007-2008" report examines the latest trends in, and provides a near-term forecast for, 16 major industries. The report focuses on Latin America's three largest economies, Brazil, Argentina and Mexico, as these countries are responsible for more than 80 percent of the region's manufacturing output.
Manufacturing industrial production in Latin America expanded at a 4.3 percent annual rate in 2006, but growth is expected to moderate to 3.9 percent in 2007 and to 3.8 percent in 2008, according to the report. Stronger growth in Brazil and an unabated Argentine expansion offset the slowdown in Mexican activity in the first half of 2007.
Brazil's growth has been fueled by improved credit conditions, rising internal demand and strong export activity that remains resilient in the face of continued currency appreciation. In addition to a weak peso policy, the unrelenting growth of domestic demand is helping Argentina. Mexico, however, remains tightly linked to U.S. producers, and therefore a slowdown seems inevitable.
The alliance's new bi-annual "Latin America Outlook: 2007-2008" report examines the latest trends in, and provides a near-term forecast for, 16 major industries. The report focuses on Latin America's three largest economies, Brazil, Argentina and Mexico, as these countries are responsible for more than 80 percent of the region's manufacturing output.
Manufacturing industrial production in Latin America expanded at a 4.3 percent annual rate in 2006, but growth is expected to moderate to 3.9 percent in 2007 and to 3.8 percent in 2008, according to the report. Stronger growth in Brazil and an unabated Argentine expansion offset the slowdown in Mexican activity in the first half of 2007.
Brazil's growth has been fueled by improved credit conditions, rising internal demand and strong export activity that remains resilient in the face of continued currency appreciation. In addition to a weak peso policy, the unrelenting growth of domestic demand is helping Argentina. Mexico, however, remains tightly linked to U.S. producers, and therefore a slowdown seems inevitable.
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