WRAPUP 2-Mexico industrial production climbs in August

* Industrial output up 8.1 pct in Aug; consensus 5.75 pct

* Output up 0.46 pct in August from July

* Auto production climbs 34.9 pct from Sept 2009
(Adds detail throughout)

MEXICO CITY, Oct 12 (BestGrowthStock) – Mexican industrial output
rose much more than expected in August while September auto
production also climbed in two positive signs for the
export-driven economy.

Industrial output climbed 0.46 percent in August from July
(MXIP=ECI: ) in the second consecutive monthly uptick since a 0.1
percent contraction in June, the national statistics agency
said on Tuesday.

The 8.1 percent year-over-year (MXIPY=ECI: ) expansion
outpaced the 5.75 percent increase that analysts expected for
Latin America’s second-largest economy.

The fate of the Mexican economy is closely tied to consumer
demand in the United States, which absorbs roughly 80 percent
of its exports. A large share of cars produced in Mexico head
north of the border and so the auto sector is emblematic of the
trade dynamics with the United States.

Auto production jumped 34.9 percent in September compared
to the same month a year ago when the local industry was still
getting a lift from the U.S. ‘cash for clunkers’ program that
gave incentives to buyers of new cars. Mexico auto exports also
climbed 44.3 percent from a year ago.

“These positive results should be viewed with caution and
in light of analysts’ concern about future growth in the U.S.
economy,” the trade group, the Mexican Association of
Automotive Industry, said in a statement.

The Mexican central bank is expected to keep its benchmark
lending rate at current levels well into 2011 to fortify the
recovery with relatively low borrowing costs.

The manufacturing sector expanded 11.6 percent compared to
last year and mining saw the second strongest growth with a 7.4
percent expansion compared to last year, the statistics agency
said.
(Reporting by Patrick Rucker and Tomas Sarmiento, Editing by
Chizu Nomiyama)

WRAPUP 2-Mexico industrial production climbs in August