Thread: Mexican economy 'firing on all cylinders'

http://www.chron.com/disp/story.mpl/bus ... 22518.html

Aug. 16, 2006, 11:28PM

Mexican economy 'firing on all cylinders'
Oil, car exports lead to growth of over 4 percent
By THOMAS BLACK
Bloomberg News

Mexico's economy grew more than 4 percent for a second straight quarter, giving the country its strongest first half in six years, as car and oil exports surged and lower interest rates buoyed spending, the government said Wednesday.

Latin America's second-biggest economy expanded 4.7 percent in the April-to-June period, outpacing a median 4.4 percent forecast from 15 analysts surveyed by Bloomberg. The second-quarter growth follows an expansion of 5.5 percent in the first quarter.

"This is an economy that's firing on all cylinders," said Gray Newman, chief Latin America economist with Morgan Stanley in New York. "Consumption is doing well, investment is doing well, and external demand is doing well."

The pickup is boosting tax revenue, providing President Vicente Fox's successor with cash he can spend on infrastructure projects and social programs in the impoverished southern part of the country.

The July 2 presidential vote, which is under appeal in a Mexican court, highlighted a divide among voters. Felipe Calderon, the candidate from Fox's party, won a majority throughout the northern states while rival Andres Manuel Lopez Obrador took the vote in southern states.

Calderon, whose margin was 0.6 percentage point, said he wants to raise government spending in the south to ease poverty and close that wealth gap between the two regions.

Lopez Obrador appealed to voters in the south with his pledges to boost spending on the poor.

Mexico's expansion has quickened as the price of oil, its biggest export, rose to record highs and as growth in the U.S. fueled demand for Mexican manufactured goods such as cars.

Mexico's economic expansion — while quickening — still lags behind the growth rates of many other Latin American countries because of Fox's failure to push through legislation to boost private investment in energy, improve the level of tax collection and make labor laws more flexible, said Luis Raul Rodriguez, chief of economic analysis for the Mexico City-based brokerage firm Vector Casa de Bolsa.

Wages rose an average of 4.4 percent in the first seven months this year, outpacing inflation, according to the central bank.

The peso has strengthened more than 5 percent since the election. On Wednesday, the peso rose to 9.2954 cents from 9.2666. The dollar fell to 10.7580 pesos from 10.7915.

Yeah, whatever...

Who-hoo........time to go back south and do the jobs you're needed to do before they have to let the South Americans do them coz you aren't there!

Mexico's expansion has quickened as the price of oil, its biggest export, rose to record highs and as growth in the U.S. fueled demand for Mexican manufactured goods such as cars.

Ironically, many of those cars Mexico is exporting used to be made right here in the United States and a lot of them are made by the U.S. big 3 (Ford, General Motors, and Chrysler). Ford, GM, and Chrysler uses cheap Mexican labor, at the expense of American workers, to manufacture cars and trucks to sell to American citizens.

Interestingly, American brands are often loaded with low-cost, foreign-made parts, and many Japanese brands are manufactured and assembled in the heartland of the United States. The Japanese "Big Three" of Toyota Motor Corp., Honda Motor Co. and Nissan Motor Co. own 25 assembly and parts manufacturing plants in the U.S. I can't argue, that's a lot of good jobs for American workers.

GM, Ford, and Chrysler still have plants in the United States and do employ a lot of people, but these companies are closing more and more of their manufacturing plants in the United States. I guess we shouldn't be so quick to blame these companies for moving out, because the Labor Unions are mostly at fault. Someone correct me if I'm wrong, but I believe most assembly line workers for Ford, GM, and Chrysler, in the United States, earn over $30.00 an hour and tons of benefits. Another interesting fact, Japanese car manufacturers don't have union workers, which reduces labor costs.