Net optimism in Mexico dipped a little in Q1, to 28%. This compares poorly with 2011-15, when the vast majority of Mexican firms had a positive outlook.
Nonetheless, the economic outlook is still robust, with the IMF forecasting real GDP growth of 2.0% in 2018. Unemployment is just 2.9%, the lowest since 2009 and less than half its peak in the aftermath of the global financial crisis.
Three quarters of Mexican exporters expect to see growth this year, and none expect a decline. This is the highest outlook in three years and twice the level of any other country in the Americas. As a result, a net 50% of firms expect revenue growth in the next year and net 46% see profits rising as well.
Despite low unemployment, only a handful of business leaders (12%) expect problems attracting skilled workers. This may be a result of a major focus on improving productivity, which is a priority for 62% of firms, well above the global average and the highest in the Americas.
The biggest constraint for Mexican firms is the volatility of the peso, mentioned as a major concern by 48%. It depreciated sharply in 2014-16, as a result of the fall in oil prices. There were significant fears about a further slide after the election of Donald Trump, given his criticism of NAFTA and of immigration flows. These factors also help explain the 38% of firms who cite economic uncertainty as a concern.
Export growth expected and productivity prioritised