MEXICO CITY (Dow Jones)–Mexico’s Confederation of Industrial Chambers said Tuesday that a strong local currency is creating difficulties for domestic industry trying to compete both in the Mexican market and abroad.
The peso is at its strongest level against the dollar since early October 2008. Mexican financial information provider Infosel quoted the currency at MXN11.5705 to the dollar in afternoon trade Tuesday.
“[T]he strengthening of the peso is becoming an ever-greater obstacle to overcome for numerous exporters whose products lose price competitiveness in the U.S. market,” the industry group, known by the acronym Concamin, said in a statement.
Concamin said the peso’s appreciation also makes it difficult for domestic companies to compete with importers in the Mexican market.
The U.S. absorbs roughly 80% of Mexican exports, the bulk of which are manufacturing exports.
Mexico exported $25.75 billion of goods in February, the most recent data available. March trade data is due out early Wednesday.
According to the median estimate in a Dow Jones Newswires survey of seven economists, Mexico will post a $500 million trade surplus for March thanks mostly to higher prices for crude exports and demand for its manufactured goods, such as autos, in the U.S.
Mexico posted a trade surplus of $344 million in the first two months of the year.
Mexico has been reporting similarly encouraging data for inflation, job creation and foreign investment. The central bank expects the Mexican economy to grow nearly 4.8% this year.
Concamin said the macroeconomic situation in Mexico leaves domestic industry some room to combat a strong currency, as well as other challenges, such as rising raw materials prices.
The manufacturing and construction sectors, both of which are represented by Concamin, hired 167,500 people during the first three months of the year, accounting for 72% of job creation in Mexico, the industry group said.
-By Amy Guthrie, Dow Jones Newswires; +5255-5980-5177; firstname.lastname@example.org