Mexico's manufacturing is likely to decelerate as the uncertainties of global growth keep a lid on global trade, reducing the impulse from manufacturing exports. Growth in manufacturing exports decelerated to 3.8% y/y in H1 15, from 7.1% in 2014. The country's oil production is likely to stabilize now that it has reversed some of the declines of recent months, and the construction sector could start growing again, albeit very slowly given the stagnation of public investment and the early stage of the housing sector recovery.



Mexico's economy likely to face headwinds in the second half of the year as the global growth is experiencing downward risk. With the suspection of risk from external factor, the economy is likely to expand by 2.2% y/y in 2015 and 2.4% y/y in 2016 (from 2.6% and 3.1) on the back of a softer growth path, estimates Barclays. Although the services sector has been growing at a solid pace, this was likely driven by electoral spending in H1 15. Accordingly, the bank expects a deceleration of this sector in H2 as this one-off positive effect fades.