From global economic impacts of the coronavirus to manufacturing activity, the market data and economic news that the Leeco® Trading team reviewed this month points towards mixed economic conditions in key regional economies during the first quarter of 2020. Here are the top metrics we watched in February.

Market Metrics to Watch

Manufacturing PMI

0
Brazil*
0
Mexico*

*AS OF JANUARY 2020

Manufacturing PMI increased month-over-month in both Brazil and Mexico during January.

Capacity Utilization

0
Brazil*
0
Mexico**

*AS OF DECEMBER 2019

**AS OF NOVEMBER 2019

Capacity utilization decreased month-over-month in Brazil and Mexico during December and November, respectively.

Imports

Below is a chart showing import levels of key Latin American countries Mexico, Brazil and Chile, as of January 2020. Imports increased in Brazil, remained flat in Chile and decreased in Mexico.

Mixed Car Production

0k
Brazil*
0k
Mexico*

*AS OF JANUARY 2020

Car production rose 12.2% month-over-month in Brazil during January, while car production in Mexico fell 4.1% year-on-year as output fell among many major automakers.

Increasing Consumer Confidence

0
Chile*
0
Mexico**

*AS OF DECEMBER 2019

**AS OF JANUARY 2020

Consumer confidence in Chile increased month-over-month from 28.3 during December. Consumer confidence in Mexico increased month-over-month during January and reached its highest level in four months.

Mexico’s GDP Growth

0%
Mexico*

*AS OF Q4 2019

Mexico’s GDP growth rate stagnated in Q4 of 2019, the same as the previous quarter and above market expectations of a 0.1% contraction. Overall, the Mexican economy shrank 0.1% in 2019, marking the first contraction in a decade.

Executive Perspective

Antonio Rosset, Commercial Director of Leeco Trading, regularly watches large economies within regional markets for insights on overall market direction.

“As the largest economy in South America, Brazil’s market outlook can indicate the direction of the overall regional market,” said Antonio. “With economists predicting strong economic and manufacturing growth in Brazil this year, we can expect to see growth in the South American and Latin American region during 2020. Leeco Trading is prepared to meet increasing raw materials demand during this growth period as importers look to control costs and offset risks.”

Economic News to Follow

Recent economic news points towards mixed manufacturing and economic conditions across regional markets.

Brazil Manufacturing PMI Increases in January

Manufacturing growth in Brazil increased during the first month of 2020, marking the sixth straight month of expansion. With many policymakers and economists expecting Brazil’s 2020 GDP growth to be the highest rate since Brazil’s 2016 recession, experts say the expanding manufacturing sector is a positive sign for the overall economy.

Mexico’s Economy Shrinks for First Time in Decade

Mexico’s economy shrank 0.1% during 2019, the first annual contraction since the global financial crisis in 2009. Manufacturing activity, which decreased 1.7% last year, helped fuel the contraction. Domestic investment was also down 5.2% during the first 10 months of 2019 among uncertainty over President Lopez Obrador’s economic policy. Mexico’s economy is expected to grow in 2020, however, due to the expected ratification of USMCA and implementation of major infrastructure projects.

Global Economic Impact of Coronavirus

As China struggles to contain the deadly new coronavirus, experts predict the disruption to the Chinese economy will spill over to the rest of the world. The world economy is predicted to see growth about 0.4% lower than expected in Q1 2020 due to the virus. Australia and Brazil, both commodity exporters to China, may see growth 0.3% below what it would have been without the virus. South Africa and Mexico are also expected to see growth about 0.15% and 0.5% lower than expected, respectively.

South Africa’s Manufacturing Output Falls

South Africa’s manufacturing output fell 5.9% year-on-year last December – the largest drop since 2014 – after falling 3.2% in November of 2019. Factory production was down 2.8% in December, and production fell 0.3% in the three months before December.