Each month, the Leeco® Trading examines market data and economic news to analyze economic conditions in Latin America and South America. Even though regional economies showed signs of slowing over the last few months, our main takeaway for October, based on data and news, is that manufacturing and economic activity are increasing in key Latin American and South American countries.

Brazil’s growing manufacturing sector and Mexico’s infrastructure investment indicate manufacturing activity is steady and may continue to grow for the remainder of 2019. Here are the top metrics we’re looking at this month.

Market Metrics to Watch

Manufacturing PMI

0
Brazil*
0
Mexico*

*AS OF SEPTEMBER 2019 

Brazil’s manufacturing PMI increased in September, the strongest expansion in factory activity since November 2017.

Mexico’s manufacturing PMI remained at a level of contraction for the fourth consecutive month in September.

Capacity Utilization

0
Brazil*
0
Mexico*

*AS OF JULY 2019 

Capacity utilization remained relatively high in both Brazil and Mexico in July, with both slightly increasing from June.

Imports

Below is a chart showing import levels of key Latin American countries Mexico, Brazil and Chile, as of September 2019. Imports in Mexico slightly declined in September, while imports in Brazil and Chile slightly increased.

Terms of Trade

Terms of trade are the ratio of a country’s export prices to a country’s import prices. When terms of trade are over a level of 100, the prices of a country’s exports rise in comparison to the price of its imports. When terms of trade are under a level of 100, the prices of a country’s exports fall in comparison to the price of its imports.

Below is a chart showing terms of trade in key Latin American countries Brazil, Chile and Mexico, as of June and July of 2019.

0
Brazil*
0
Chile**
0
Mexico*

*AS OF JULY 2019 

**AS OF JUNE 2019

Executive Perspective

With a growing manufacturing sector in Brazil and other Latin American countries, Antonio Rosset, Commercial Director of Leeco Trading, explains how Leeco is prepared to meet increased raw material demand.

[fusion_testimonials design=”classic” navigation=”no” speed=”” backgroundcolor=”” textcolor=”” random=”” hide_on_mobile=”small-visibility,medium-visibility,large-visibility” class=”” id=””][fusion_testimonial name=”Antonio Rosset” avatar=”image” image=”https://leecotrading.com/wp-content/uploads/2020/01/AntonioRosset-LeecoTrading-300×300-1.jpg” image_id=”1229|full” image_border_radius=”” company=”Leeco Trading” link=”” target=”_self”]

“As manufacturing grows in Brazil and other Latin and South American countries, we are prepared to meet increased raw material demands using our expertise and sourcing capabilities,” Antonio said. “In addition to sourcing steel and metal, we have expanded our import capabilities to also offer a variety of fertilizer products to meet demand and better serve our Latin American region customers.”

[/fusion_testimonial][/fusion_testimonials]

Economic News to Follow

Across Latin America and South America, recent economic news points to increased manufacturing and economic activity.

Mexico to Invest in Infrastructure Projects

Mexican President Andres Manuel Lopez Obrador announced he will soon unveil a set of major infrastructure projects to help boost the economy. More than $400 billion USD will be invested in these projects, which are planned to take place over the course of the 2018-2024 administration.

Brazil Manufacturing Sector Expands in September

Brazil’s manufacturing sector expanded at the fastest rate in seven months in September, with a PMI reading of 53.4. Increases in new orders and employment helped fuel the expansion. September marked the second consecutive month of growth in manufacturing.

Chile Economic Activity Increases in August

Economic activity in Chile increased 3.4% in August from the same time a year ago, beating expectations. A surge in mining activity helped boost economic activity – mining activity increased 5.3% in August compared to August 2018.

GM Lays Off Workers in Mexico Due to UAW Strike

GM idled production at their Silao, temporarily laying off more than 6,000 workers. GM stated the decision to idle production was the result of a parts shortage due to the UAW’s strike against GM. A spokesperson from GM stated their “primary focus is to get a deal and get everybody back to work” as soon as possible.