Mexico: The recession is ending
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.
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.
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