Due to improved year-on-year performance in the services sector —which includes activities such as transportation and storage— , the Mexican economy would have rebounded in May 2026.

The Timely Indicator of Economic Activity (IOAE), prepared by the  National Institute of Statistics and Geography (Inegi) , anticipated a  1.1% year-on-year increase in the country’s economic activity during the fifth month of the year. On a  monthly basis , the indicator would have remained unchanged.

The year-on-year increase signals  moderate economic expansion in Mexico , despite ongoing global trade fluctuations and geopolitical conflicts such as those in the Middle East. However, caution remains.

According to the Inegi report,  by economic activity groups , an annual increase of 0.7% is expected in  secondary activities , which include the manufacturing and construction industries.

In the  tertiary sector , which includes services such as commerce, transportation and storage, communications, education, and healthcare, an annual increase of 1.7% is projected. Furthermore, a 1.1% increase in the Global Indicator of Economic Activity (IGAE) is anticipated, also on an annual basis.

In its monthly measurement, the IGAE and tertiary activities are expected to show no variation; while a decrease in secondary activities of 0.2% is estimated for May 2026.

According to Inegi, the IOAE is a statistical tool that allows anticipating the behavior of the IGAE, as well as secondary and tertiary activities, up to five weeks in advance.

Its measurement is important, as it allows for a preliminary view of economic behavior in order to make informed decisions for better planning in this area.

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El cargo Mexican economic activity is expected to grow slightly year-on-year in May; monthly growth stagnates apareció primero en T21.

Mexico has not fully capitalized on the opportunity created by nearshoring , despite the advantages offered by its trade integration with the United States and its position in North America, said Paulina Anciola, Deputy Director of Economic Studies at Banamex .

In an interview with T21, the specialist pointed out that, although investments associated with the relocation of production chains were registered after the COVID-19 pandemic , the phenomenon did not reach the magnitude that was expected a few years ago.

“In terms of nearshoring , I really think a large part of it remained just a narrative,” he stated.

Anciola acknowledged that these investments were made particularly in the Bajío region, where new centers were established. However, he noted that the realization of nearshoring has been less than expected, since in the last two years there has been practically no significant influx of new capital , and a large part of the Foreign Direct Investment (FDI) corresponds to reinvestment of profits from companies already established in Mexico.

In that regard, he explained that during the first years after the pandemic there was an expectation that Mexico would capture a significant portion of the investment that was looking to leave Asia and move closer to the US market.

However, he considered that the increase in global uncertainty ended up “cooling” some of those projects.

“When there is greater uncertainty, long-term investment tends to wait for conditions to be a little more favorable, for rates to be a little lower, and for the rules of the game to be clearer,” he explained.

The economist argued that the country maintains structural advantages that are difficult to replicate , particularly due to its proximity to the United States and its participation in the United States-Mexico-Canada Agreement (USMCA).

“At the end of the day, being on the side of the United States is going to stay there forever, and Mexico is going to have that advantage against the rest of the world forever,” he said.

However, he warned that the country continues to face challenges in terms of productivity, infrastructure, job training, and investment certainty.

“I think a large part of nearshoring has been lost because of that, and I think Mexico has been in the ‘now we are going to take advantage of the opportunity’ phase for many years, and in the end it has never fully materialized,” he stated.

According to Anciola, as long as there is no new wave of investment,  it will be difficult to talk about a consolidation of the phenomenon in Mexico.

According to the Ministry of Economy , FDI in Mexico reached a record figure of 23 billion 591 million dollars (mdd) in the first quarter of 2026 (1Q26), which meant a growth of 10.4% compared to the same period in 2025.

Of the total FDI, new investments increased 7.5% year-on-year in Q1 2026; while reinvestment of profits registered a year-on-year increase of 33.5% in the cycle.

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El cargo The materialization of nearshoring has been less than expected: Banamex apareció primero en T21.

Mexican industrial activity registered a 2.1% increase in April 2026 compared to last March, derived from an increase in construction activities, reported the National Institute of Statistics and Geography (Inegi) .

According to the agency’s figures, two of the four components of the Monthly Indicator of Industrial Activity (IMAI) performed positively in the fourth month of the year, with  construction showing the greatest growth, rising 7.6% compared to March 2016. Manufacturing industries advanced 1.2% during April on a monthly basis.

Conversely, mining fell 0.7%, and the generation, transmission, distribution and marketing of electricity, water supply and natural gas by pipeline to the end consumer fell 0.3%, both components at a monthly rate.

In April 2026,  the IMAI showed an increase in its annual measurement of 1.8 percent .

Within the indicator, manufacturing industries; and generation, transmission, distribution and marketing of electricity, water supply and natural gas by pipeline to the final consumer each decreased by 0.3%, on an annual rate.

Construction grew 10.2%, and mining activities rose 3.4% compared to April 2025.

With the increase recorded in April 2026, both on a monthly and annual basis, Mexican industrial activity is once again showing signs of recovery in an economic scenario marked by constant trade changes in the world and conflicts such as the one in the Middle East.

According to the results, the IMAI was driven by the construction sector, due to public infrastructure projects, works focused on urban development and some segments of building; however, other industries, such as manufacturing, showed mixed behavior.

The Monthly Indicator of Industrial Activity allows us to know and monitor the evolution of industrial activity in Mexico, Inegi emphasized.

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El cargo Construction drives Mexican industrial activity in April apareció primero en T21.

Oaxaca (13.5%), Quintana Roo (8.9%) and Baja California Sur (5.9%) were the Mexican states that showed the best performance in their industrial activity in February 2026 compared to last January, the National Institute of Statistics and Geography (Inegi) announced  .

According to the Monthly Indicator of Industrial Activity by Federal Entity (IMAIEF) —which provides information on the behavior of industrial activity in the states—, Sonora and Nayarit also stood out in their industries during the period.

Conversely, the states that reported the largest drops in the second month of the year compared to January 2026 were Veracruz with a drop of 3.7%, Guerrero with a decrease of 3.5% and Morelos with a decline of 2.8 percent.

In its annual measurement, the entities where industrial activity showed the greatest progress were Hidalgo, Colima and Tamaulipas, with 20.7%, 15% and 14%, respectively, during February 2026.

The states with the largest year-on-year declines in their industrial activity were Quintana Roo with 23.7%, Morelos with 12.5%, and Durango with 10.6%.

Industrial activity by sector

In February 2026,  manufacturing industries  showed significant progress in Tabasco, Hidalgo and Puebla at an annual rate.

In  construction , the largest increases occurred in the State of Mexico, Colima, Hidalgo, Tlaxcala, Tamaulipas and Nayarit.

The  mining sector  registered increases in Tamaulipas, State of Mexico, Chiapas, Veracruz and Yucatan.

In the generation, transmission, distribution and marketing of electricity, water supply and natural gas by pipeline to the end consumer,  the increases in Nayarit, Durango, Chiapas, Colima, Querétaro and Campeche stood out at an annual rate.

Industrial performance in some Mexican states has shown progress, although the country faces a complex economic situation stemming from global tariff uncertainty.

This is compounded by a slowdown in the Mexican economy, which has paused investments and infrastructure projects in the country.

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El cargo Industrial activity in Mexico: Which states stood out in February? apareció primero en T21.

Inflation in Mexico continues to slow. In May 2026, the National Consumer Price Index (INPC), which measures the average change in prices of products that make up a basket of goods and services representative of household consumption in the country, stood at 3.94% year-on-year , according to information from the National Institute of Statistics and Geography (Inegi) .

According to the agency, the core inflation index , which excludes goods and services with high volatility or whose prices do not respond to market conditions, increased 0.22% month-on-month . Within this index, goods prices rose 0.16% and services prices increased 0.29%.

The  non-core price index  —which includes goods and services whose prices are subject to fluctuations— fell 1.65% month-on-month . Within this index, fruit and vegetable prices dropped 3.18%, and energy and government-regulated prices decreased 1.67%. This was a result of seasonal reductions in electricity rates in 11 cities across the country.

Although inflation receded slightly during the period, the price of some products continues to put pressure on Mexicans’ wallets, such as potatoes and other tubers,  which increased in cost by 12.68%, LP domestic gas  by 2.04%, chicken by 1.52%, and corn tortillas with a monthly increase of 0.81%.

Conversely,  cucumber  was the product that decreased the most with a drop of 31.50%, followed by  green tomato  with a drop of 28.73%,  electricity  with 17.88%,  lemon  with 18.51%, natural domestic gas with a decrease of 7.88% and egg  with 4.92% monthly.

The states with a CPI variation above the national average were Hidalgo, Yucatán, and Jalisco. Meanwhile, Sinaloa, Sonora, and Baja California Sur were the states that reported the smallest increases in May 2026.

According to an analysis by Grupo Financiero Ve por Más (BX+) , the inflationary outlook is complex. Energy commodity prices remain high due to the conflicts in the Middle East, and their ultimate effects on inflation are still uncertain.

“This adds to the high levels of underlying inflation, despite a context of low economic dynamism,” he stressed, and indicated that on an annual basis, overall inflation was just below 4% for the first time in four observations .

“The inflationary outlook remains challenging. Energy commodity prices continue to be affected by geopolitical conflicts. This, coupled with a local context of wage pressures and expectations that economic activity will eventually show less weakness going forward,” the analysis stated.

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El cargo Mexicans’ wallets “breathe” a sigh of relief; inflation slows in May apareció primero en T21.

Investment expectations in Mexico have not changed after the presentation of the Mexico Plan , stated Paulina Anciola, Deputy Director of Economic Studies at Banamex , considering that the strategy has not yet shown concrete results to trigger new productive projects .

The specialist explained that Banamex kept its economic projections for the country unchanged and currently forecasts a growth of 1.3% for 2026, above the consensus of analysts of 1.1% and the estimate of 0.8% from the Organization for Economic Cooperation and Development (OECD) .

“When the Mexico Plan came out, everyone was asking us: ‘Are you finally going to change your growth forecasts?’ The truth is, we didn’t make any changes,” he asserted.

Anciola pointed out that, although the strategy sets ambitious goals to boost investment and economic growth, there are still doubts about how they will be implemented and evaluated.

“We think that much of it remained just a very nice plan, with many good ideas and many metrics that would be good to achieve, but then it wasn’t followed up on. They didn’t explain how these goals are going to be met, how they are going to be implemented, or what indicators are going to be used to evaluate progress,” he commented.

The economist considered that one of the main obstacles to attracting capital continues to be the uncertainty perceived by investors in both the national and international environment.

“On the one hand they are telling you: ‘We have the Mexico Plan, we want to boost investment,’ but at the same time they have made a series of reforms that only increase regulatory uncertainty,” he stressed.

In his opinion, this situation has led many companies to adopt a cautious stance while they observe the evolution of the reforms and the economic environment.

“What we have seen in recent years is that investors seem to be in wait-and-see mode, waiting a bit to see how the reforms turn out,” he said.

He also emphasized that Foreign Direct Investment (FDI) announcements should be analyzed in greater detail. Although the overall figure was positive last year, Banamex observed a decline in FDI during the fourth quarter.

Furthermore, he explained that a large part of the reported resources correspond to reinvestment of profits from companies that already operate in Mexico and not necessarily to the arrival of new productive projects .

“When you break down the data, there are no new investments. Virtually all foreign investment is from the large companies that are already here,” he stated.

According to Anciola, as long as a new wave of investment is not observed and uncertainty persists, it will be difficult for Mexico to fully take advantage of the opportunities associated with the relocation of production chains.

“Until we see a wave of new investments, I don’t think we can say that it’s materializing,” he concluded, referring to nearshoring .

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El cargo Plan Mexico has not changed investment expectations: Banamex apareció primero en T21.

The Consumer Confidence Indicator (CCI), based on the results of the National Consumer Confidence Survey (ENCO), stood at 43.5 points in May 2026 , which implied a decrease of 0.7 units compared to last April, according to information from the  National Institute of Statistics and Geography (Inegi)  and the  Bank of Mexico (Banxico) .

In its year-on-year comparison and with seasonally adjusted figures, the ICC also showed a slowdown, registering a  drop of 3.4 points  in the fifth month of 2026.

This decrease resulted from monthly reductions in the five components that make up the Consumer Confidence Indicator.

During May, the component that measures the country’s expected economic situation in 12 months compared to the current one was the one that fell the most, with a decrease of 1.6 monthly points.

The country’s economic situation today, compared to 12 months ago, has dropped 1 point compared to April 2026.

The current economic situation of household members compared to that of 12 months ago ; as well as the current possibilities of household members, compared to those of a year ago to make purchases of furniture, television, washing machine, among others , were reduced by 0.7 units per month each.

The component that measures the expected economic situation of household members in 12 months compared to the current one registered a monthly decrease of 0.3 points.

On an annual basis, all five components of the ICC also fell , with the expected economic situation of the country in 12 months compared to the current one showing the greatest decrease at 5.8 points.

The decline in consumer confidence, both in its monthly and annual measurements, signals a setback in the Mexican economy and reflects the deterioration in families’ perception of their financial situation, although a rebound in consumption is expected due to cyclical factors.

The BASE Financial Group estimated that private consumption will grow between 1.8% and 2.2% , driven by the World Cup and a greater number of tourists arriving in Mexico for the sporting event.

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El cargo “At rock bottom”, Mexican consumer confidence in May apareció primero en T21.

For an economy facing uncertainty due to the review of the United States-Mexico-Canada Agreement (USMCA) , the manufacturing sector is emerging as one of the main drivers to sustain the country’s growth this year, according to experts.

During a discussion organized by Mundi (a fintech company specializing in financing and working capital solutions for exporting and importing companies in Mexico), representatives from the manufacturing , financial, and export industries agreed that manufacturing will continue to play a key role in the Mexican economy, particularly due to its contribution to exports and productive integration with North America.

Paulina Anciola, deputy director of Economic Studies at Banamex , pointed out that exports were the main factor that prevented a deeper economic downturn last year and considered that manufacturing will continue to be a relevant element for the country’s economic performance.

“The manufacturing sector will be key to growth, especially considering that exports are what’s saving us from GDP declines,” he said.

The specialist explained that, despite the contraction observed in some indicators during the first quarter of 2026, Banamex maintains an economic growth expectation of 1.3% for this year, supported by a gradual recovery of productive and export activity.

From the perspective of the automotive industry, Alberto Bustamante, president of the National Agency of Suppliers of the Automotive Sector (ANAPSA) , highlighted that the automotive sector represents the second most important pillar of the Mexican economy, contributing about 5% of the national Gross Domestic Product (GDP) and 24% of the manufacturing GDP.

He added that strengthening regional supply chains and increasing domestic content will be key factors in maintaining Mexico’s competitiveness against other markets.

For his part, Israel Morales, national director of the Mexico-United States Relations and International Affairs Committee of the National Council of the Export Manufacturing Industry (Index) , described export manufacturing as a success story that has demonstrated the ability to adapt to economic crises, changes in global supply chains and periods of trade uncertainty.

He considered that regional integration will continue to be one of Mexico’s main assets , although he warned that it will be necessary to strengthen productivity, talent development and the participation of the private sector in the construction of industrial policies.

Similarly, Flor González, general director of the National Association of Paint and Ink Manufacturers (ANAFAPYT) , maintained that the country’s economic future will depend on strengthening national manufacturing , technological innovation, and the training of specialized talent.

“The future of the Mexican economy will not be built solely with more trade; it will be built with manufacturing and Mexican talent,” he said.

Participants agreed that manufacturing growth will require greater coordination between government and private sector to improve infrastructure, facilitate investment, strengthen domestic supply chains, and enhance the competitiveness of production chains established in Mexico.

The importance of manufacturing is also reflected in employment. According to ANAPSA, the automotive sector generates more than 1.2 million direct jobs and nearly five million indirect jobs , in addition to impacting 252 economic sectors related to the country’s productive activity.

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El cargo Mexico’s economic challenge: growing amid uncertainty apareció primero en T21.

Amid uncertainty over US tariff policy,  Mexican business confidence fell 0.1 points in May 2026 compared to April; it also decreased 0.5 units year-on-year, according to the Global Business Confidence Opinion Indicator (IGOEC) , which stood at  48.2 points , as announced this Monday by the  National Institute of Statistics and Geography (Inegi) .

This was due to the caution shown by business owners in the manufacturing, construction, and trade sectors, reflecting pessimism, as the IGOEC fell below the 50-unit threshold.

In this regard, the  Business Confidence Indicator (BCI)  for  manufacturing industries  stood at  47.5 points  in May, a decrease of 0.4 points compared to April. Within this indicator, the component that saw the largest decline was the perception of a favorable time to invest, with a monthly drop of 1.8 points.

The  Construction Energy Efficiency Index (ICE)  was  47.8 units  in May 2026. This represents a decrease  of 0.3 points  compared to the previous month. With this figure, the indicator has remained below the 50-point threshold for 21 consecutive months.

In the cycle, the  Commerce ICE  fell  0.7 points  compared to the previous month, settling at  48.3 units . All its components experienced declines compared to last April, with the   most significant drop, at 1.8 points, being the most opportune time to invest .

In the reference month, the  Business Confidence Index (BCI) for private non-financial services  increased  by 0.4 points  compared to April 2016, reaching  48.4 units . One of its components showed a negative performance. The current economic situation of the company experienced the largest decline, falling by 0.7 points month-on-month.

According to the Global Business Confidence Opinion Indicator, three of the four sectors it covers showed declines during May 2026.

This uncertainty has been generated, among other reasons, by international factors such as tariffs around the world and the conflict in the Middle East, as well as by internal factors, such as a weakening of the Mexican economy and private consumption.

Manufacturing orders also performed negatively

Meanwhile, the Manufacturing Orders Indicator (IPM), which tracks the performance of the manufacturing economy in Mexico, also showed declines on a monthly and annual basis during May 2026, mainly due to a contraction in orders and production, reported Inegi and the  Bank of Mexico (Banxico) .

In the fifth month of the year,  the MPI stood at  49.2 points  , a decrease of 1.1 points compared to April. Its annual measurement also registered a negative figure, with  a decline of 1.4 points .

Within it, four components that make up the IPM registered declines and only one had a positive performance in the monthly comparison.

In May 2026,  orders  fell by 3.3 points compared to April. This was followed by a monthly decrease of 0.3 points  in production . Total employment and on-time delivery of supplies from suppliers  each decreased by 0.1 points compared to April 2026. Conversely,  supplies showed a monthly increase of 0.1 points.

By subsector, the transportation equipment sector saw the largest year-on-year decrease , with a drop of 5.6 points. Meanwhile, non-metallic minerals and basic metals experienced the largest increase, rising 4.4 points year-on-year.

According to Banxico, knowing the Manufacturing Orders Indicator is crucial because it provides a preview of economic activity in Mexico.

“An increase in the MPI suggests that companies are receiving more orders and producing more, which can have a positive impact on the economy and investor confidence,” he explained.

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El cargo Business confidence in Mexico falls during May; manufacturing orders also decline apareció primero en T21.

Amid uncertainty over US tariff policy,  Mexican business confidence fell 0.1 points in May 2026 compared to April; it also decreased 0.5 units year-on-year, according to the Global Business Confidence Opinion Indicator (IGOEC) , which stood at  48.2 points , as announced this Monday by the  National Institute of Statistics and Geography (Inegi) .

This was due to the caution shown by business owners in the manufacturing, construction, and trade sectors, reflecting pessimism, as the IGOEC fell below the 50-unit threshold.

In this regard, the  Business Confidence Indicator (BCI)  for  manufacturing industries  stood at  47.5 points  in May, a decrease of 0.4 points compared to April. Within this indicator, the component that saw the largest decline was the perception of a favorable time to invest, with a monthly drop of 1.8 points.

The  Construction Energy Efficiency Index (ICE)  was  47.8 units  in May 2026. This represents a decrease  of 0.3 points  compared to the previous month. With this figure, the indicator has remained below the 50-point threshold for 21 consecutive months.

In the cycle, the  Commerce ICE  fell  0.7 points  compared to the previous month, settling at  48.3 units . All its components experienced declines compared to last April, with the   most significant drop, at 1.8 points, being the most opportune time to invest .

In the reference month, the  Business Confidence Index (BCI) for private non-financial services  increased  by 0.4 points  compared to April 2016, reaching  48.4 units . One of its components showed a negative performance. The current economic situation of the company experienced the largest decline, falling by 0.7 points month-on-month.

According to the Global Business Confidence Opinion Indicator, three of the four sectors it covers showed declines during May 2026.

This uncertainty has been generated, among other reasons, by international factors such as tariffs around the world and the conflict in the Middle East, as well as by internal factors, such as a weakening of the Mexican economy and private consumption.

Manufacturing orders also performed negatively

Meanwhile, the Manufacturing Orders Indicator (IPM), which tracks the performance of the manufacturing economy in Mexico, also showed declines on a monthly and annual basis during May 2026, mainly due to a contraction in orders and production, reported Inegi and the  Bank of Mexico (Banxico) .

In the fifth month of the year,  the MPI stood at  49.2 points  , a decrease of 1.1 points compared to April. Its annual measurement also registered a negative figure, with  a decline of 1.4 points .

Within it, four components that make up the IPM registered declines and only one had a positive performance in the monthly comparison.

In May 2026,  orders  fell by 3.3 points compared to April. This was followed by a monthly decrease of 0.3 points  in production . Total employment and on-time delivery of supplies from suppliers  each decreased by 0.1 points compared to April 2026. Conversely,  supplies showed a monthly increase of 0.1 points.

By subsector, the transportation equipment sector saw the largest year-on-year decrease , with a drop of 5.6 points. Meanwhile, non-metallic minerals and basic metals experienced the largest increase, rising 4.4 points year-on-year.

According to Banxico, knowing the Manufacturing Orders Indicator is crucial because it provides a preview of economic activity in Mexico.

“An increase in the MPI suggests that companies are receiving more orders and producing more, which can have a positive impact on the economy and investor confidence,” he explained.

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El cargo Business confidence in Mexico falls during May; manufacturing orders also decline apareció primero en T21.