UPDATE 2-Mexico industrial output dips in March for second month
(Adds impact on quarterly growth, economist comment) MEXICO CITY, May 12 (Reuters) - Mexican industrial output dipped for a second month in a row in March as mining, factory output and utilities contracted, data showed on Thursday, pointing to weaker-than-expected economic growth in the first quarter. Industrial output fell 0.2 percent from February in seasonally adjusted terms, the national statistics agency said, against expectations for a 0.05 percent increase in a Reuters poll. The surprisingly weak data suggests that a preliminary estimate released late last month for economic growth during the first quarter in Latin America's No. 2 economy was overly optimistic, economists noted. "Unfortunately, there are no telling signs of a significant near-term turnaround of the industrial sector despite a very competitive currency," Goldman Sachs economist Alberto Ramos wrote in a client note. Mexico's peso has slumped sharply since late 2014, but the currency weakness has not helped spur significant growth in exports. Among the components of industrial output, factory production slipped 0.1 percent in March compared to February. Mexico exports mostly factory goods, nearly 80 percent of which it sends to the United States. Uneven U.S. demand weighed on growth in Mexico's economy last year. Utilities fell by 0.8 percent compared to February while mining output dropped 1.1 percent, all in seasonally adjusted terms. Oil production was down 1.6 percent month-on-month in its biggest drop since last August. Mexico has been hit by a decade-long slump in oil production, while a plunge in crude prices has spurred state-run company Pemex to cut back on investment plans and damped interest in a landmark opening of the energy sector to private investment. The construction sector grew 0.6 percent month-on-month. Domestic growth has helped offset weaker exports and the oil slump over the last year. Compared with March 2015, industrial output fell 2.0 percent compared to expectations for a 0.8 percent drop. (Reporting by Michael O'Boyle; Editing by Bernadette Baum and Phil Berlowitz)
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