Jose Ruiz

By Chris Kraul – LATimes.com
December 11, 2009

Led by resource-rich Brazil, the region is forecast to enjoy 4.1% growth next year, far outpacing the U.S.

Reporting from Bogota, Colombia – From appliance stores in Brazil to auto assembly lines in Mexico, signs are evident that Latin America has seen the worst of the global economic crisis and is poised for solid expansion.

The region is expected to post economic growth of 4.1% next year, according to a forecast released Thursday by the United Nations’ Economic Commission for Latin America and the Caribbean. That’s a stronger rebound than previously anticipated.

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A study to quantify and map the quality of human capital in 2008 and 2013

If we consider talent to be a global commodity, as precious as oil or water, then it should be possible to analyze it as a commodity; to predict its supply and demand. The Global Talent Index, developed in collaboration with the Economist Intelligence Unit, explored the distribution of talent in the world in 2007 and 2012.

When we developed the Global Talent Index, only three Latin American countries – Argentina, Brazil and Mexico – were included; their low performance within the global context came as no surprise.  The Latin America Talent Index uses the same methodology but allows closer examination of the region’s talent pool by assessing: Argentina, Brazil, Chile, Colombia, Costa Rica, Dominican Republic, Ecuador, Mexico, Peru and Venezuela.

In the past, the challenge for Latin American companies has been access to capital and technology in a market dominated by exporting, mining and agribusiness, oligopolies and government controlled companies. Business interests were dependent on government actions and vice versa. Leadership was important, but not a key success factor in fostering corporate growth and profitability.

Unprecedented advances have occurred since the early-1990s, helped by the opening up of markets, deregulation, the modernization of economies, greater integration and interaction with global markets, the development of local financial and capital markets, and the creation of large global companies headquartered in the region (‘multi-latinas’).  As a result, leadership and talent have started to emerge as important competitive factors. The 2008 global financial downturn has created new priorities and placed new demands on the current leaders. In the short term, companies may be concerned with quarterly results but in the long term the differentiator will be their ability to identify, develop and retain highly qualified talent. The Latin America Talent Index reveals such talent will continue to be scarce over the next five years, posing a challenge to companies and economies eager to continue their growth and consolidation.

Permanently reversing this trend relies heavily on government policies, business strategies and cultural values, and practical results may take time to appear. But as soon as awareness is raised amongst businesses, governments and individuals, and affirmative action adopted, the present and projected talent shortfall will start to be reversed.

This study represents an important first step in this process.

Manoel Rebello, Regional Managing Partner, Latin America
Heidrick & Struggles

| Download Full Latin America  Report (PDF document)

| Download Full Global Report (PDF document)

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Mexico’s troubled oil industry – How many Mexicans does it take to drill an oil well?
Oct 1st 2009 | MEXICO CITY
From The Economist print edition

More than 140,000, and even then they’re not very good at it. For this, now acute, problem, blame the politicians

IT IS bad enough that Mexico’s economy is in deep recession, triggered by its close links to the ailing United States. To make matters worse, the country’s oil industry, its fiscal cash-cow for the past three decades, is declining swiftly (see chart). As recently as 2004 Cantarell, the country’s main offshore field, produced 2.1m barrels per day (b/d) of crude. Now its output is just 600,000 b/d. There are no obvious replacements: 23 of the 32 biggest fields are in decline. Barring big new finds, the world’s seventh-largest oil producer is forecast to become a net importer by 2017.

The Mexican treasury is ill-prepared for this. Taxes and royalties from Pemex, the state-owned oil monopoly, have accounted for almost two-fifths of federal revenues in recent years, compensating for one of Latin America’s weakest tax regimes (which collects just 11% of GDP). If oil output drops below 2m b/d, as many industry-watchers fear, the government would be forced to cut spending by more than 10%—or jack up taxes correspondingly, to avoid an unsustainable budget deficit. This might threaten economic recovery…

|Read Full Story at Economist.com

About Heidrick & Struggles International, Inc.
The world’s premier provider of senior-level executive search and leadership consulting services. The firm’s executive recruiters and leadership experts operate from principal business centers in North America, Latin America, Europe and Asia Pacific. In Mexico, Heidrick & Struggles operates offices in Mexico City and Monterrey. For more information about Heidrick & Struggles please visit www.heidrick.com

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It’s not done yet.  But signs continue to indicate that we are heading in the right direction.
by Jose Ruiz

Monterrey, Mexico (August, 25, 2009).-There are internal economic elements in Mexico that can be considered serious weaknesses if the global recession continues over a long period of time. As we continue to monitor key economic data it continues to look like Mexico will dodge the bullet.

80% of Mexico’s exports go to the United States.  The economy in Mexico will begin to pick-up steam when the U.S. consumer starts spending again.

This week U.S. consumer confidence proved that the sleeping giant might be waking up. The index climbed more than forecast at the same time that national home prices increased for the first time in three years.

The increase beyond forecast may be a surprise but the correlation should not be. Most of the net worth of the average American lies in two pots: The equity of their homes and their retirement savings. Both of which had been badly battered in the last couple of years leaving the average consumer feeling unprotected wondering what they would get by with  if they became part of the unemployment statistics.

While the official unemployment numbers are still of concern reports say the proportion of people who said jobs are hard to get decreased to 45.1 percent from 48.5 percent.

The positive environment in the U.S. is already having an effect in Mexico. The peso’s strength is at levels many thought we were never going to see again. It strengthened 0.1 percent to 12.8152 per U.S. dollar today.  At some point in trading it hit 12.7674, a number not seen since November 11 of last year.

The signs are encouraging and it appears we are on the path to recovery. There are internal concerns, but there is reason to continue to be optimistic as long as the U.S. economy continues to show signs of strength.

About Heidrick & Struggles International, Inc.
The world’s premier provider of senior-level executive search and leadership consulting services. The firm’s executive recruiters and leadership experts operate from principal business centers in North America, Latin America, Europe and Asia Pacific. In Mexico, Heidrick & Struggles operates offices in Mexico City and Monterrey. For more information about Heidrick & Struggles please visit www.heidrick.com

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By Jose Ruiz

Monterrey,  Mexico (August 3, 2009).- Overall the free fall appears to have slowed but we are still falling.  In the US the stabilization of consumer spending, unemployment benefits and the housing markets, a lessening of financial turmoil and increased government spending all suggest the longest recession since the 1930s may be close to ending.
 
In the U.S. Manufacturing shrank in July at the slowest pace in many months and factories moved closer to stabilization. In a Bloomberg News survey, The Institute for Supply Management’s factory gauge increased to 46.5, from 44.8 in June (readings less than 50 signal contraction).
 
Federal Reserve Chairman Alan Greenspan believes the worst is behind us, “collapse, I think, is now off the table…I’m pretty sure we’ve already seen the bottom… In fact, if you look at the weekly production figures for various different industries, it’s clear that we’ve turned, perhaps in the middle of last month, the middle of July.” Greenspan said.
 
U.S. Recovery will be the first step for a recovery in Mexico but other concerns are looming.  A growing deficit and falling oil output may be sleeping monsters that can put added pressure on growth, the exchange rate and an already tricky inflation scenario.

Jose Ruiz is a Principal in Heidrick & Struggles’ Monterrey office. As an executive recruiter he has worked on executive search projects for multinational clients in industrial sectors and consumer markets. He can be reached at +52 (818) 8625-6521 or jruiz@heidrick.com

About Heidrick & Struggles International, Inc.
The world’s premier provider of senior-level executive search and leadership consulting services. The firm’s executive recruiters and leadership experts operate from principal business centers in North America, Latin America, Europe and Asia Pacific. In Mexico, Heidrick & Struggles operates offices in Mexico City and Monterrey. For more information about Heidrick & Struggles please visit www.heidrick.com

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Mexico’s peso has rallied to achieve its largest quarterly gain in 14 years rising 7.5 percent over the second quarter of the year after reaching a record low in March.

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We’re closely watching indicators in the US that would signal an improvement in consumer demand.  Mexico’s efforts to tackle the effects of the ongoing global financial crisis can help mitigate the impact but the recovery will come from an improved US economy.
 
“Mexico’s fate is so closely linked to the United States that they can’t get out of the recession on their own,” said Eugenio Aleman, a Latin America economist from Wells Fargo Bank.  “They are trying to smooth over the problems. The central bank has loosened policy. But there is not much the government can do.”
 
Looking for signs of recovery…
A report last Friday confirmed consumer confidence in the US tumbled more than expected in June, to a 28-year low. The report by the Reuters/University of Michigan said the confidence index fell to 56.7 from May’s 59.8. The figure is the lowest since the record low of 51.7 in May 1980.
 
Chicago Federal Reserve Bank President Charles Evans said the U.S. unemployment rate could get closer to 10 percent instead of 9.5 percent. He added that the jobless rate could peak later this year — earlier than a mid-2010 peak previously expected. This could signal a deeper fall but an earlier recovery.
 
Potential risks that can derail a recovery…
A current point of concern for many is soaring commodity prices. Food prices in the US have jumped 5% the past 12 months, with bakery products (up 10.5%), dairy (+11%) and oils (+12.8%) leading the way. Energy prices have skyrocketed. Fuel oil and other fuels have soared 50.7% in the past 12 months.

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Jose Ruiz is a Principal in Heidrick & Struggles’ Monterrey office. As an executive recruiter he has worked on executive search projects for multinational clients in industrial sectors and consumer markets. He can be reached at +52 (818) 8625-6521 or jruiz@heidrick.com

About Heidrick & Struggles International, Inc.
The world’s premier provider of senior-level executive search and leadership consulting services. The firm’s executive recruiters and leadership experts operate from principal business centers in North America, Latin America, Europe and Asia Pacific. In Mexico, Heidrick & Struggles operates offices in Mexico City and Monterrey. For more information about Heidrick & Struggles please visit www.heidrick.com

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Recession in the US will bottom out in fourth quarter, says Moody’s economist Economy won’t ‘kick in to high gear’ until 2011 or 2012, Mark Zandi says.

Mark predicts the battered economy will begin a slow upward climb after the recession in the United States bottoms out in the fourth quarter of 2009,

“The economy won’t come roaring back,” he said. “The sectors that generally lead us out of a recession — housing and vehicles — are flat on their back and won’t revive rapidly. The economy will kick into high gear in 2011 and 2012.”

It is expected that China will lead the way followed by the United States. Mexico will likely follow since Mexico’s economy has suffered as the global crisis chokes demand in the U.S., which buys 80 percent of the country’s exports.

Mexico needs U.S. consumer demand to pick-up and it does not look good if consumer confidence is an indicator of future demand and unemployment is a driver of consumer confidence. The Congressional Budget Office expects the unemployment rate to keep rising through 2010 to peak over 10%.

It does not look like the recession in Mexico has bottomed out and it does not look like it will in the near future.

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Jose Ruiz is a Principal in Heidrick & Struggles’ Monterrey office. As an executive recruiter he has worked on executive search projects for multinational clients in industrial sectors and consumer markets. He can be reached at +52 (818) 8625-6521 or jruiz@heidrick.com

About Heidrick & Struggles International, Inc.
The world’s premier provider of senior-level executive search and leadership consulting services. The firm’s executive recruiters and leadership experts operate from principal business centers in North America, Latin America, Europe and Asia Pacific. In Mexico, Heidrick & Struggles operates offices in Mexico City and Monterrey. For more information about Heidrick & Struggles please visit www.heidrick.com

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Mexico’s central bank cut its key interest rate by three quarters of a point Friday saying strong action was needed because the economy had contracted more than expected this year after a fall in exports to the United States and the national shutdown to control swine flu.

This will be an active week:

On Monday, we are expecting to hear that March industrial production declined 8.41 percent year-on-year (according to a Reuters survey).

On Wednesday, the release of the gross domestic product numbers are expected to show the economy shrinking 7.61 percent in the first quarter, compared with the same period a year ago.

On Thursday, March retail sales data are expected to show a decline of 5.93 percent, while Mexico’s consumer price index for the first half of May is expected to fall 0.3 percent.

“A string of sluggish economic data should reinforce expectations of a potentially deeper rate-cut cycle,” RBC Capital Markets said in a research note.

However, it is widely believed that the first signs of an economic turn around will come from US consumer indicators. As the US consumer goes so does the economy in Mexico.  The peso and Mexican stocks soared as US recession fears began to ease early this week.

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Jose Ruiz is a Principal in Heidrick & Struggles’ Monterrey office. As an executive recruiter he has worked on executive search projects for multinational clients in industrial sectors and consumer markets. He can be reached at +52 (818) 8625-6521 or jruiz@heidrick.com

About Heidrick & Struggles International, Inc.
The world’s premier provider of senior-level executive search and leadership consulting services. The firm’s executive recruiters and leadership experts operate from principal business centers in North America, Latin America, Europe and Asia Pacific. In Mexico, Heidrick & Struggles operates offices in Mexico City and Monterrey. For more information about Heidrick & Struggles please visit www.heidrick.com

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The peso remains strong floating around 13 pesos to a dollar and inflation in April was reported at 0.38%, an improvement over March’s 0.58%

In another positive sign for manufacturing in Mexico the U.S. government report showed employers cut fewer jobs in April than economists forecast. The U.S. buys 80 percent of Mexican exports.

“This was a good number,” said Jaime Ascencio, a fixed- income strategist in Mexico City at Actinver SA, the nation’s biggest independent money manager. “It raises bets that diminishing job losses will translate into more consumption.”

Economists are forecasting Banco de Mexico will trim its target to 5.25 percent from 6 percent on May 15, according to the median of 16 forecasts in a Bloomberg survey. The bank has reduced rates by 2.25 percentage point so far this year to 6 percent last month in an effort to revive growth.

With information from bloomberg.com>

Jose Ruiz is a Principal in Heidrick & Struggles’ Monterrey office. As an executive recruiter he has worked on executive search projects for multinational clients in industrial sectors and consumer markets. He can be reached at +52 (818) 8625-6521 or jruiz@heidrick.com

About Heidrick & Struggles International, Inc.
The world’s premier provider of senior-level executive search and leadership consulting services. The firm’s executive recruiters and leadership experts operate from principal business centers in North America, Latin America, Europe and Asia Pacific. In Mexico, Heidrick & Struggles operates offices in Mexico City and Monterrey. For more information about Heidrick & Struggles please visit www.heidrick.com

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