Monday, October 11, 2010

Is Mexico's economy weaning itself off its addiction to The USA?

So there I was on Friday evening, rummaging through Mexico's Ministry of the Economy website like any normal obsessed LatAm numbers nerd, when I came across the country breakdown for exports from Mexico. As anyone with a passing interest in LatAm economics knows, Mexico is extremely tied to its big northern neighbour when it comes to export revenues as this first chart shows nice and clearly:

Each of those columns shows the total US dollar value of exports from Mexico to the great wide world in the first six months of each year, that's because we get a nice clean comparison to what has happened so far in 2010. As is clear, exports to the US are the lion's share of things, as for example in the first half of 2010 total Mexico exports tallied U$141.039Bn, with U$133.008 of that going to The USA.

At first glance it seemed to these eyes like business as usual, but then on staring at the numbers a bit there seemed to be a bit of a trend. So a flick of the wrist, a new calc and sure enough, we get this chart generated.


Yes indeed, the percentage of Mexican exports to The USA has been dropping in recent years. The drop isn't massive (eg 7.6% in the period 2004 to 2010) and nobody will deny that the US is still by far the most important market for Mexican goods but there's definitely a trend happening here.

What's going on here? Can the drop be totally blamed on the depletion of the Cantarell oil field, or is Mexico finally getting itself into gear, getting new markets and trying to kick its utter dependency on The USA? Sure seems that way. Inquiring minds (etc)....