Mexico | Limited formal employment growth in April amid a challenging economic environment

Summary

The slowdown in formal employment in Mexico deepened in April, driven primarily by declining investment and growing business distrust. The contraction in key economic sectors and economic uncertainty point to weak job creation throughout the year.

Key points

• Key points:
• In April, formal employment posted an annual growth of just 0.2% —the lowest rate in recent years— and, for the first time in the historical series (excluding 2020), recorded a seasonally adjusted monthly contraction of (-)0.13%.
• The sharp decline in gross fixed investment (-6.0% YoY in February), particularly in construction, and the continued deterioration in business expectations, as reflected in a 6.2% annual drop in the business confidence index, partly explain the weak formal job creation.
• Key industrial sectors, such as manufacturing and construction, continue to post negative annual variations.
• The nationwide slowdown in employment continues, showing regional heterogeneity. Some areas remain resilient while others are deeply affected. The Southeast region stands out with the sharpest declines in formal employment, particularly in Tabasco (-8.3%) and Campeche (-5.3%).
• Real wages grew by 3.7% annually but show a more marked slowdown; although real wages remain relatively stable, lower job creation significantly limits their growth.

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