Mexico’s Industrial Production Slumps 2.0% in March, Worst Decline in Five Months

Mexico’s industrial production fell 2.0% in March 2025 compared to February, marking the steepest monthly decline in five months, according to data from the National Institute of Statistics and Geography (INEGI).

The industrial production index dropped from 110.5 points in February to 108.3 points in March, reflecting widespread weakness across multiple sectors.

The manufacturing sector, which represents approximately one-fifth of Mexico‘s economy, contracted 1.1% after experiencing robust 2.9% growth in February.

Metal goods production suffered the largest decline at 5.5%, while transportation manufacturing, including automotive production, fell 1.1%.

Other manufacturing subsectors showed significant weakness, with printing dropping 6.5%, wood industry declining 4.7%, and paper production falling 4.5%.

Mining activity decreased 2.7% in March, reversing the slight 0.1% gain recorded in February. Oil and gas extraction contracted 2.7% after rising 1.0% the previous month, while non-oil mining fell 4.3% following a 0.6% increase in February.

The generation and distribution of electricity, water, and gas decreased 1.1%, continuing a negative trend for the fourth consecutive month. Construction stood as the only bright spot, growing 0.8% in March, its third straight month of expansion.

Mexico’s Industrial Sector Struggles Despite Signs of Resilience

The industrial downturn has directly impacted employment. Personnel employed in the industrial sector decreased 0.1% in March, while total remuneration fell 0.2%.

Manufacturing employment has now contracted for 14 consecutive months, with the employment index dropping to 46.4 in March, well below the 50-point threshold separating contraction from expansion.

Analysts attribute the volatility to uncertainty surrounding U.S. tariff policies, with the February surge partly reflecting manufacturers ramping up production ahead of anticipated tariffs.

The situation may stabilize as U.S. trade policies become clearer and Mexican officials work to preserve advantages under the USMCA free trade agreement.

President Claudia Sheinbaum’s economic plan, “Plan Mexico,” provides some support to the construction sector through increased public investment. The plan targets $100 billion in private infrastructure investment for 2025 and promotes greater domestic content in public purchases.

Despite monthly weakness, industrial production rose 1.9% year-over-year in March, beating market expectations of a 1.5% expansion.