Mexican industrial production figures for February point to revival in the sector

Industrial production in Mexico gave back some of the prior month's gains in February, but the underlying trend was pointing to ongoing support for the economy from activity levels in the sector.

Output from the country's industries edged back by 0.1% month-on-month in February, following a gain of 0.7% in the month before.

Production levels in utilities and manufacturing increased by 1.2% and 0.5% month-on-month, respectively.

Going in the other direction, output in construction registered a sharp drop of 2.5% while mining output was 0.2% lower.

However, in comparison with year-ago levels industrial production shrank by 1.4%, thanks to positive so-called 'base effects'.

Andres Abadia, senior international economist at Pantheon Macroeconomics, characterised the report as a "relatively strong one", highlighting how the positive underlying trend suggested industrial production would prop up gross domestic product over the first three months of the year.

Abadia expected the sector would benefit from past weakness in the Mexican peso in the second half of 2016, the modest rebound in oil prices and - in particular - an improvement in the US economy, although he also anticipated a marginal slowdown in the second quarter.

Reductions in government spending, however, could be expected to hamper that trend due to their negative impact on construction spending.