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NEWS
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 Ciudad Juarez accounts for 40% of Mexican maquiladora employment
In the first ten months of 2005, Ciudad Juarez maquiladora industry generated 22 thousand 549 jobs, representing 40% of the 56 thousand 792 jobs registered in even term in said sector at a national level, Tomas Mena Sanchez, President of Asociacion de Maquiladoras Asociacion Civil (AMAC), said.
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China is already Mexico's second supplier
China not only displaced Mexican products from the American market, but became the second goods supplier in Mexico, after the USA, economy that stays as the first supplier for Mexico. The Sub-secretary for Trade Negotiations at the Ministry of the Economy declared this and added that Japan is the third supplier, a country that for several years was in the second place, but was displaced in 2003 by the Chinese.
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Pemex invests US$2.697 billion in refining plants
Mexico - Pemex Refinacion is planning to invest US$2.697 billion in the expansion and refurbishing of its refining plants, in order to decrease the sulfur contents in gasoline and diesel to improve quality and reduce polluting emissions. Sub-director of Industrial Safety and Environment Protection at Pemex Refinacion, Daniel Gomez Bilbao, informed that with the investment made to improve petroleum products...
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Brand new vehicle assembly plant in Campeche
To start its Advanced Technology Industrialization process in 2006, Campeche will inaugurate its. first vehicle assembly plant, Cafer Integra, that will be one of a kind in Mexico's southeast. José Antonio Richaud Pinto, Minister of Industrial and Trade Foster, pointed-out that this plant, which will start operating next year, will serve the domestic and Central America markets.
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Company from India coming to NL
Monterrey, Mexico - Sasken, a company from India, chose Nuevo Leon over Ottawa and Brazil to. install its first plant out of India. Sasken's President for North America, Krishna Jhaveri, pointed-out that Nuevo Leon was chosen due to its infrastructure, the support received from the Government and the English-speaking labor force qualified in engineering they found here.
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Cessna lands factory in Chihuahua
The Minister of Industrial Development, Alejandro Cano Ricaud, informed that Cessna Air Craft and ITT Industries will generate around 850 direct jobs in the State of Chihuahua. Cessna will start operating in March, 2006, while ITT kicked off with the first production stage a few days ago in the City of Chihuahua, with an investment of US$12 Million in machinery and 750 direct jobs, Mr. Cano said.
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Belgian auto-parts company to establish in Leon
Leon, Guanajuato - With an investment close to US$63 Million and generating 211 direct jobs, the Belgian auto-parts company VCST will establish in this municipality and will start operating in May 2006. For the time being the Company has started recruiting and training personnel. This was informed in a ceremony attended by Governor Juan Carlos Romero Hicks;
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ARTICLE OF THE WEEK
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Mexican GDP Falls but No One Notices
By Franklin D. Berger
Federal Reserve Bank of Dallas
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Two years ago, we reported on these pages about difficulty in correctly interpreting Mexico's GDP reports.1 The complication involves Easter's habit of moving around in the Gregorian calendar. Sometimes this religious holiday occurs in the first quarter and sometimes in the second. Because economic activity is reduced in the quarter in which Easter falls, when Easter switches quarters from one year to the next, the situation is ripe for the confusion we pointed out earlier.
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Easter fell in the second quarter in both 2003 and 2004, so last year the issue was moot. This year, Easter fell in the first quarter, leading to possible confusion.
In the opening sentence of its statistical release on Mexico's second quarter 2005 gross domestic product, the Instituto Nacional de Estadística, Geografía e Informática (INEGI, Mexico's census bureau) reports that GDP was 3.1 percent greater than in the second quarter of 2004. This statistic is calculated from data that have not been seasonally adjusted and, in particular, have not been adjusted for Easter's wayward effects. The report further notes that GDP declined 0.42 percent in second quarter 2005 relative to first quarter 2005.
The year-over-year statistic is what the Mexican report has historically headlined-and with good reason. Until fairly recently, INEGI did not calculate, or at least did not report, seasonally adjusted statistics. When analyzing data that are not seasonally adjusted but are subject to seasonality, it is standard operating procedure to look at year-over-year changes. When seasonal effects are irregular with respect to the calendar, such as Easter's, the year-over-year calculation is not valid when Easter falls in different quarters in successive years. In other words, INEGI's lead statistic sometimes suffers from statistical bias.
INEGI's seasonal adjustment procedure is sophisticated, taking full account of the Easter effect. The seasonally adjusted data have been purged of the potentially distorting effect of Easter moving around in the calendar. This makes it possible to report meaningful quarter-over-quarter statistics, which INEGI does-but does not emphasize. Although the main reason for emphasizing year-over-year changes has been eliminated with INEGI's now more sophisticated approach to seasonal adjustment, it may still be useful to calculate such changes. But to be meaningful, these changes must be calculated from the seasonally adjusted data. According to INEGI's own seasonally adjusted data, Mexico's GDP grew 1.9 percent from second quarter 2004 to second quarter 2005. INEGI's reported figure of 3.1 percent is biased upward because Easter's occurrence in second quarter 2004 depressed that period's output.
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In spite of the stumbling block placed before them, analysts are often able to make sense of the situation. However, their reportage is often awkward and confusing. In one example of many, DismalScientist reports, "The Mexican economy showed a rebound in the second quarter, positively influenced by the Easter holiday."2 Note that the terminology "in the second quarter" is confusing. One might think DismalScientist is referring to growth between the first and second quarters, but that is not the case. It is referring to INEGI's reported growth of 2.4 percent from first quarter 2004 to first quarter 2005, compared with 3.1 percent from second quarter 2004 to second quarter 2005. Such reportage is typical of articles about Mexican GDP. In other contexts, reporters often use the expression "in the quarter" to mean "during the quarter," a more appropriate usage.
According to INEGI's seasonally adjusted (and Easter-corrected) data, GDP declined by 0.42 percent from first to second quarter 2005. What sort of "rebound" is this? Even the year-overyear data show no rebound when corrected for Easter. The year-over-year figures above for first- and second-quarter growth (2.4 and 3.1 percent, respectively)become 3.7 and 1.9 percent, respectively. In other words, year-overyear growth declined, primarily due to severe slowing in the first quarter (0.18 percent) and an actual decline of 0.42 percent in the second quarter.
How much clearer to report, simply, "After averaging growth of about 1 percent per quarter in 2004, GDP growth fell to 0.18 percent in the first quarter of 2005 and GDP declined 0.42 percent in the second quarter. There is no need to mention Easter at all.
-Franklin D. Berger
Berger is director of technical support and data analysis in the Research Department of the Federal Reserve Bank of Dallas.
Notes:
1. "(Mis)reporting Mexico's Gross Domestic Product,' by Franklin D. Berger, Federal Reserve Bank of Dallas Southwest Economy, Issue 5, September/October 2003.
2. "Mexico: GDP," by Alfred Coutino, in DismalScientist, August 16, 2005,
www.economy.com/dismal/pro/blog.asp?cid=16827.
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MEXICO'S WEEKLY HEADLINES
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| » Mexico's telecomm industry consolidated in 2005 |
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| » Mexico will receive USD$18 billion of FDI in 2006 |
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| » Maquiladora industry "snatch" personnel to commercial sector |
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| » More than 1.1 million new cars sold in 2005: AMIA |
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| » Mexico anticipates to duplicate its aerial market in 3 years |
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