UPDATE 1-Mexico industrial output unexpectedly shrinks in August
(Adds details, background) MEXICO CITY, Oct 12 (Reuters) - Mexico's industrial production unexpectedly shrank in August as construction, utilities and mining contracted while factory output edged higher, data showed on Wednesday. Mexican industrial output fell 0.4 percent in August from July in seasonally adjusted terms, the national statistics agency INEGI said, compared with expectations for a 0.1 percent increase in a Reuters poll of economists. Mexico's economy shrank in the second quarter, mostly due to a slump in industry. It was the first time over the past three years that the economy had shrunk in any quarter compared to the preceding three months. Uneven demand for Mexican manufactured exports in the United States, Mexico's top trading partner, and declining oil production have weighed on Latin America's No. 2 economy. Among components of industrial production, factory output rose 0.2 percent in August compared to July. Factory production was up for a fourth month in a row after a sharp contraction early this year. Mexico sends mostly factory-made goods like televisions and cars to its northern neighbor. The construction sector shrank 0.8 percent in August versus July, down for a second month in a row. Mining, which includes oil production, was down for a seventh straight month, dropping by 1.7 percent, its biggest drop in over a year. The utilities sector, which includes power, gas and water distribution, fell by 1.0 percent in August, month-on-month. Industrial production was up 0.3 percent year-over-year compared with expectations for a 0.7 percent rise. (Reporting by Michael O'Boyle; Editing by Bernadette Baum)
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