Production in manufacturing declined in July, despite a boost in exports during the same period.
Mexico's industrial production has taken a hit, as the sector has experienced a decline for the fourth month in a row. According to the National Institute of Geography and Statistics (INEGI), the production volume decreased by 2.7% in July compared to the same month in 2024.
This decline was observed across several key industries. The automotive sector, machinery manufacturing, electronics, and pharmaceutical production saw significant drops, with machinery experiencing a decrease of 5.3%, automotive and auto parts dropping by 0.9%, metal products declining by 1.6%, electrical equipment decreasing by 0.4%, and pharmaceuticals experiencing a sharp drop of 11.0%.
However, not all sectors have been affected equally. Data processing equipment and chemicals saw slight increases, providing a glimmer of hope amidst the industry-wide slowdown.
The textiles and apparel sector, along with the manufacturing of textile inputs and textile finishing, have been particularly hard hit, with declines between 8-9%. Inflationary pressures and international risks have further constrained manufacturing activity in these subsectors.
Despite these challenges, Mexico's total exports in July 2025 reached US $56.7 billion, marking a 4% increase compared to the same month in 2024. The growth in manufacturing exports offset the contractions in export value for other sectors, such as oil and the automotive sector.
Exports from the oil sector decreased by 23% year-over-year to US $1.9 billion in July 2025, while the automotive sector's export value declined by 7% to US $15.9 billion. However, exports to the United States from the automotive sector fell by 9.2% in July 2025, while there was a 4.9% increase to other destinations.
The manufacturing sector contributed more than 90% of the total export value in July 2025, amounting to US $52.3 million. The growth in manufacturing exports helped to offset the decline in employment, as the number of people employed in the manufacturing industry declined 0.2% in the monthly comparison, equivalent to 19,000 jobs lost in July.
Both internal and external pressures have contributed to the industry's slowdown. Economic uncertainty, low levels of productive investment, and reduced domestic and international demand have weakened the sector. Self-employed workers experienced a 2.1% decline in July and a dramatic 16% drop in employment since last year.
The decline in manufacturing employment was also reflected in the number of hours worked, which fell by 0.2% in July compared to June, and 2.2% compared to 2024.
As Mexico navigates these challenges, the government and industry leaders will need to address the root causes of the slowdown and implement strategies to support the recovery of key industries and employment levels.
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