Weekly Report - 6 January 2004

REMITTANCES | Continuing rise this year. Western Union's director in Mexico, Eduardo Levy, predicts that remittances by Mexican expatriates will increase this year by 8% to 12%. In the first 10 months of last year they totalled US$11.1bn, and they were expected to surpass US$14bn by year-end.

Apart from the anticipated improvement in the US economy, Levy says that an important factor in the increase will be the lowering of remittance costs due to increased competition. While only seven years ago the remittance business was in the hands of only five or six firms, now there are about 140. There are some 15.5m Mexican expatriates in the US (4m or so illegally); 85% of the remittances are made by electronic means, and the average individual remittance is US$300.

MINING | Reversal of decline? Figures for mining output in October, showing an 8.7% year-on-year increase, suggest that the fortunes of the industry may be changing. The latest developments have left the 10-month accumulated output 2.2% below that of the same period last year. Among the minerals showing increases in October are gold, silver and copper, items in which Mexico enjoys a significant share of the world market — and also the items that had recorded the greatest falls since last year.

EMPLOYMENT | More job losses in manufacturing. Employment in manufacturing last October was down 4.1% on the same month of 2002. This took the 10-month year-on-year decline to 3.9%. A worrying detail is that the number of hours worked was down by 4.4%, a sign of shrinking productivity. All branches of manufacturing have recorded falls. The steepest were in metalworking (-7.3%), textiles & apparel (-6.6%) and wood products (-5.3%). As we have reported, the countrywide open unemployment rate increased again in November, to 3.8%, after two months of falls from the five-year peak of 3.96% reached in August.