The economic performance of each State in Mexico

I published this article on Plaza de Armas, newspaper from Queretaro, February 14th, 2011 (http://www.plazadearmas.com.mx/)

To complete this analysis about the ups and downs of Mexico’s economic fall and recovery, let’s analyze from the perspective of each State performance.

I will make this analysis with data for 2009, since GDP’s data for 2010 by State is still unavailable. However, this figures let us understand the impact of the recent financial crisis.

The economic crisis was of different magnitude for each State, depending on the composition of their economic sectors.

We can see that the northern border States, that depend heavily on commerce and manufacturing, had falls from 9% to 12%. On the other hand, most of the States on the Pacific coast had milder falls (between 2% and 5%), mainly because they have a strong primary sector (agriculture, cattle, fishing, forestry) that kept its level or improved it during 2009.

Only 4 States had a growth during 2009, and all of them driven by different reasons: Baja California Sur was pushed by an impressive growth in the construction sector, Tabasco by oil activities, Zacatecas by commerce and the primary sector, and Morelos, that kept almost the same economic level than 2008.

In the Central region, the States had falls of different magnitude. Meanwhile Puebla had a fall of almost 9% (caused mainly by the machinery and equipment sector, and commerce), Guanajuato’s fall was of 4% (driven by the machinery and equipment sector, and the foods, beverages and tobacco sector).

Referring to Querétaro, during the period 2003-2008 it was the State with the second biggest growth in the country (35.8%), driven by the growth in three main sectors: commerce sector, transportation, couriers and storage services, and construction. However, these same sectors fell from 8% to 15% during 2009, resulting in the tenth biggest fall of the States, and its GDP went back to 2007 levels.

Practically, every economic sector had growth during 2010; therefore, all the States that had a fall below 5% in 2009 may have already recovered during 2010, and if the trends remain, the rest of the States will do it during 2011 and 2012.

This detailed understanding of the country’s economic outlook is useful to have a better evaluation of business opportunities. If you make evaluations based only in perceptions, or with general data, you can outlook opportunities or have unrealistic expectations.