The Mexican government released the outlook for U.S. industrial production as part of the context for its budget and revenue programming for 2025.
Why this is important: because the Mexican economy has strong trade, financial, tourism, economic and investment ties with the United States.
In the Economic Package for 2025, the Ministry of Finance and Public Credit (SHCP) projects that U.S. industrial production will increase 0.5% by 2024.
Industrial Production Outlook
For 2025, the SHCP forecasts a greater expansion of this indicator, of 2.0%. But this figure will depend mainly on the fiscal stimulus granted to the semiconductor industry (CHIPS).
From August 2023 to August 2024, with seasonally adjusted figures, U.S. industrial production fell 0.3 percent.
On a disaggregated basis, industrial production had the following year-over-year changes, considering that same period:
By major market groups
- Final products: -7 percent.
- Consumer goods: +0.9%.
- Business equipment: -6.1%.
- Non-industrial supplies: -0.2%.
- Construction: -0.8%.
- Materials: 0.0%.
By major industrial groups
- Manufacturing: -0.3%.
- Mining: -1.5%.
- Utilities: +1.5%.
U.S. Economy
The SHCP estimates that the U.S. economy will grow by 2.7% in 2024. However, for 2025 it projects a lower dynamism, with a growth of 2.2%. This behavior would be explained by a solid domestic demand, but counteracted by the slowdown of the main global economies.
On the other hand, according to Banxico’s survey, private sector specialists foresee a growth of 2.5% for 2024. They also anticipate a slowdown, with an increase of only 2.0% by 2025.
Likewise, the SHCP projects that average inflation in the United States will be 2.9% in 2024. By 2025, this rate is expected to decrease to 2.2%. However, this figure would still exceed the long-term inflation target of 2.0% set by the Federal Reserve (FED).
Finally, it is important to mention that the FED has initiated a monetary policy easing cycle. This process includes the reduction of benchmark interest rates. All this is taking place in a context marked by a gradual deceleration of inflation.