LEI for Mexico Fell in September

About the Leading Economic Index and the Coincident Economic Index:

The Leading Economic Index provides an early indication of significant turning points in the business cycle and where the economy is heading in the near term. The Coincident Economic Index provides an indication of the current state of the economy. Additional details are below.

The Conference Board Leading Economic Index^®(LEI) for Mexico fell by 1.3 percent in September 2023 to 109.6 (2016=100), after decreasing by 0.3 percent in August. The LEI declined by 0.8 percent in the six-month period from March to September 2023, a reversal from an increase of 0.4 percent the previous six-month period from September 2022 to March 2023.

The Conference Board Coincident Economic Index^® (CEI) for Mexico ticked up by 0.1 percent in September 2023 to 113.8 (2016=100), after increasing by 0.3 percent in August. The CEI grew by 2.2 percent in the six-month period from March to September 2023, a faster rate than the 1.4 percent pace of growth over the previous six-month period.

“The Mexico LEI fell again in September after a slight decrease last month,” said Malala Lin, Economic Research Associate, at The Conference Board. “Most of the LEI’s components were negative or flat, except for the increase in the price of oil. Manufacturing inventories have been the most significant drivers of weakness in the LEI, not only in September, but also over the last six months. Although inflation is easing, Banxico is not planning to begin cutting interest rates as other Latin American economies have. This hawkish stance may weigh on near-term growth. The Conference Board projects year-over-year real GDP growth for Mexico of 3.3 percent in 2023, but to moderate, expanding by 1.8 percent in 2024."

The Mexico LEI fell in September while the CEI continued to rise steadily

All components but the price of oil contributed negatively, leading to the decline in the September LEI

The annual growth rate for the LEI dipped into the negative territory, suggesting moderation in activity ahead

About The Conference Board Leading Economic Index® (LEI) for Mexico

The composite economic indexes are the key elements in an analytic system designed to signal peaks and troughs in the business cycle. The indexes are constructed to summarize and reveal common turning points in the economy in a clearer and more convincing manner than any individual component. The CEI is highly correlated with real GDP. The LEI is a predictive variable that anticipates (or “leads”) turning points in the business cycle by 5 months. Shaded areas denote recession periods or economic contractions. The dates above the shaded areas show the chronology of peaks and troughs in the business cycle.

The six components of The Conference Board Leading Economic Index® for Mexico include: Industrial Production (Construction), Stock Prices, U.S. Refiners’ Acquisition Cost of Domestic and Imported Crude Oil, Manufacturing Inventories (Opinion Balance), Federal Funds Rate, and Real Exchange Rate.

To access data, please visit: https://data-central.conference-board.org/

About The Conference Board

The Conference Board is the member-driven think tank that delivers trusted insights for what’s ahead. Founded in 1916, we are a non-partisan, not-for-profit entity holding 501 (c) (3) tax-exempt status in the United States. www.tcb.org