Mexico’s industrial activity picks up in June, but still has more ground to recover

In June, Mexico's industrial activity experienced a modest 0.2% increase month-on-month, barely compensating for the decline of 0.7% seen in May, according to the national statistics agency INEGI. Despite the slight rebound, a 0.8% year-on-year expansion in the Monthly Indicator of Industrial Activity (IMAI) was noted, following a 0.2% growth in the previous May.

This surge marked the third consecutive month of yearly growth, a reversal from the regular declines since March 2025. Mining emerged as a standout sector for June's industrial output, with a remarkable 7% boost driven by operational enhancements and the persistent appeal of international metal prices. This performance was further bolstered by a 2.1% monthly rise in April and robust activity in the construction subsector.

However, the overall picture for the second quarter remains cautious, with INEGI highlighting that there is no clear upward trajectory. In the past 12 months, the Mexican industry has seen six months of negative monthly changes. The construction sector played a pivotal role in June's rebound, growing by 3% compared to May and addressing the losses incurred when it contracted by 3.7% month-over-month.

The building construction work saw a 4.8% increase, while civil engineering work contracted by 2.7% and specialized work declined by 0.6%. Analysts attribute the construction surge to heightened infrastructure investments, ongoing projects, and a surge in private investment linked to the ongoing construction of facilities for the 2026 World Cup.

However, a warning sign emerges from economist Sergio Luna, who suggests that the construction surge is primarily driven by civil works, raising concerns about long-term sustainability due to potential disruptions in future projects. The mining sector led the charge in June with a 7% increase, followed by construction's 4.2% growth, while the electricity, generation, transmission, and distribution sector (comprising water and gas supply) rose by a modest 0.7% compared to June 2025.

Mining's ascent can be linked to operational advancements, a favorable benchmark, and attractive international metal prices. Conversely, manufacturing, often regarded as the backbone of Mexico's industrial output, remained stagnant, contracting 1.2% year-on-year and experiencing two consecutive months of negative annual growth. Ten out of the 21 manufacturing branches measured by the IMAI reported declines, including non-metallic minerals (-5.2%), textiles (-4.6%), transportation equipment (-3.2%), clothing (-2.2%), and furniture (-1.7%).