November 2006

Mexico’s maquiladora industry lost some momentum in August, with employment rising at a modest 1.4 percent annualized rate. Year-to-date, the industry has expanded at a more vigorous pace of 5.8 percent, for a gain of 45,350 new jobs.

Looking at performance by sector, job gains were broad based during the month—the only exceptions being the transportation and textile sectors, which saw declines of 1.6 and 0.1 percent, respectively (Chart 1). Electronics and chemicals added the most jobs, for a total of 2,529.

Following strong growth earlier in the year, the maquiladora industry located along the Texas–Mexico border witnessed a job decline of 5.5 percent in August. All cities along this border saw maquiladora payrolls decrease during the month (Chart 2). Despite the loss, year-to-date the region has added over 20,000 jobs.

The maquiladora slowdown at the national level and job losses along the Texas–Mexico border are likely due to recent weakness in U.S. industrial production. The outlook for the maquiladora sector remains mostly positive, however. Expectations are for the U.S. industrial sector to regain its upward momentum in the coming months.

Notes Data have been seasonally adjusted by the Dallas Fed. See Data Basics, "Seasonally Adjusting Data," for more information on seasonal adjustment. For a definition of maquiladora, see "Data Definitions." For additional information or questions, please contact Roberto Coronado at 713-483-3275 or Jesus Cañas at 915-521-5233.