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Latin America Outlook: Brazil's Strength Raises 2008 Forecast; Growth Will Decelerate in 2009
Report from Manufacturers Alliance/MAPI predicts 4.9 percent industrial growth in '08, 4.4 percent growth in '09 for region
Arlington, VA — August 27, 2008 — Latin American-based manufacturers look set to maintain momentum from a strong 2007 and first quarter 2008, with good prospects for continuing to increase output this year and in 2009, according to the "Manufacturers Alliance/MAPI Latin America Outlook: 2008-2009."
The biannual analysis examines the latest trends and provides a near-term forecast for 16 major industries. Based on the report, manufacturing production growth is projected to decelerate in 2009.
The report focuses on Latin America's three largest economies — Brazil, Argentina, and Mexico — as these countries are responsible for more than 80 percent of the region's manufacturing output.
MAPI raised its forecast for overall manufacturing output in Latin America in 2008 to 4.9 percent from its 3.8 percent forecast in the December 2007 report, slightly above the 4.6 percent expansion of 2007. The forecast also indicates that manufacturing production growth will ease to 4.4 percent in 2009, with deceleration in Brazil and Argentina, but slight improvement in Mexico.
Brazil Key for 2008
In developing its forecast, MAPI utilizes data from national statistical agencies, assigning weighted average annual production indexes for each industry. The weights are determined by a country's sector value added in U.S. dollar terms.
Brazil's manufacturing production is expected to expand 6.8 percent in 2008 and is a key element in MAPI's higher forecast for the current year. The manufacturers of motor vehicles, other transport equipment, machinery and equipment, and electrical machinery and apparatus — all expanding at double-digit rates — are the most important contributors to output growth in Brazil. Mexico is expected to increase a modest 2 percent and Argentina 7.5 percent in 2008, a deceleration from 9 percent in 2007. The outlook is cautiously optimistic as well.
The biannual analysis examines the latest trends and provides a near-term forecast for 16 major industries. Based on the report, manufacturing production growth is projected to decelerate in 2009.
The report focuses on Latin America's three largest economies — Brazil, Argentina, and Mexico — as these countries are responsible for more than 80 percent of the region's manufacturing output.
MAPI raised its forecast for overall manufacturing output in Latin America in 2008 to 4.9 percent from its 3.8 percent forecast in the December 2007 report, slightly above the 4.6 percent expansion of 2007. The forecast also indicates that manufacturing production growth will ease to 4.4 percent in 2009, with deceleration in Brazil and Argentina, but slight improvement in Mexico.
Brazil Key for 2008
In developing its forecast, MAPI utilizes data from national statistical agencies, assigning weighted average annual production indexes for each industry. The weights are determined by a country's sector value added in U.S. dollar terms.
Brazil's manufacturing production is expected to expand 6.8 percent in 2008 and is a key element in MAPI's higher forecast for the current year. The manufacturers of motor vehicles, other transport equipment, machinery and equipment, and electrical machinery and apparatus — all expanding at double-digit rates — are the most important contributors to output growth in Brazil. Mexico is expected to increase a modest 2 percent and Argentina 7.5 percent in 2008, a deceleration from 9 percent in 2007. The outlook is cautiously optimistic as well.
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