Conference Board LEI for Mexico Continues to Drop

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The Conference Board Leading Economic Index (LEI) for Mexico declined 0.8 percent and The Conference Board Coincident Economic Index (CEI) increased 0.3 percent in June.

The Conference Board LEI for Mexico fell in June following a decline in May. Net insufficient inventories* and the (inverted) real exchange rate made the largest negative contributions to the index. During the first half of 2015, the leading economic index declined by 1.4 percent (about a −2.7 percent annual rate), an improvement from the decline of 4.4 percent (about a −8.6 percent annual rate) over the previous six months. However, the weaknesses among the leading indicators remained more widespread than the strengths in the last six months.

The Conference Board CEI for Mexico, a measure of current economic activity, improved slightly in June. The coincident economic index increased by 1.4 percent (about a 2.8 percent annual rate) in the first half of 2015, only slightly slower than its 1.7 percent increase (about a 3.4 percent annual rate) over the previous six months. Meanwhile, real GDP expanded by 1.6 percent (annual rate) in the first quarter of this year, down from 2.7 percent (annual rate) in the last quarter of 2014.

The LEI for Mexico fell again in June, and has declined in four of the last six months. As a result, the six-month change in the LEI remains negative. However, the rate of decline has moderated considerably since the second half of last year. Meanwhile, the six-month growth rate of the CEI remains relatively steady. Taken together, the improvement in the six-month change in the LEI and the steady growth in the CEI suggest that Mexico’s economic expansion will continue, however its rate of expansion is unlikely to pick up sharply for the remainder of this year.

LEADING INDICATORS. Three of the six components that make up The Conference Board LEI for Mexico increased in June. The positive contributors to the index—from the largest positive contributor to the smallest one— are the industrial production construction component, the US refiners’ acquisition cost of domestic and imported crude oil, and stock prices. Net insufficient inventories* and the (inverted) real exchange rate decreased in June. The (inverted) federal funds rate remained unchanged.

With the 0.8 percent decrease in June, The Conference Board LEI for Mexico now stands at 101.2 (2010=100). Based on revised data, this index declined 0.6 percent in May and remained unchanged in April. During the six-month span through June, the index decreased 1.4 percent, with two of the six components increasing (diffusion index, six-month span equals 41.7 percent).