Can Mexico Manufacturing Gain From Oil Prices & Euro Zone Worries?

Strong oil prices and ongoing euro zone concerns continue to prime the pump in Mexico Manufacturing.  Even Mexico’s neighbor, Brazil, whose otherwise competitive aviation sector is feeling the pinch.  Embraer’s CEO, Frederico Curado, recently voiced concerns about reduced aircraft orders specifically identifying JetBlue as ‘unlikely to exercise its options on 100 aircraft’ in the near term.  The trickle-down effect for Mexico manufacturers could be affected though potentially cutting either way with a diverse industrial base and optimal proximity.

As a leading exporter from Brazil, Embraer stands to lose some ground in growth with its narrower production line of 100 passenger jets, unless they are to expand, into the more desirable larger aircraft market like their competitors.  With Mexico manufacturing consistently rising across diverse sectors, Brazil’s ‘flagship exporter Embraer dominates their own economy’s landscape.  If JetBlue curtails its jet purchases from Embraer it could hurt.  The aviation industry has experienced a significant decline in profits from 2010’s $16 billion to the projected $4 billion for 2011.

Source: http://www.reuters.com/article/2011/06/20/us-embraer-curado-idUSTRE75J16N20110620


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