Mexico's April fixed investment sees sharpest decline since 2020

MEXICO CITY, July 3 (Reuters) - Mexican gross fixed investment slumped 12.5% in April compared with the same month a year earlier, the national statistics agency said on Thursday, its steepest drop since October 2020.

The measure of spending on machinery, equipment and new construction logged its eighth annual reduction in a row, a drop stronger than the 9% slope expected by the market.

"Going forward, domestic demand is expected to remain weak and face headwinds from still high domestic rates, soft business confidence, fiscal consolidation drag, softening formal labor market, and peaking credit cycle," Goldman and Sachs analysts said in a note to clients.

The gross fix investment was burdened by "large declines in the machinery and equipment and construction sectors," analysts at brokerage Monex said.

Compared with the prior month, the seasonally adjusted gross fixed investment fell 1.7% in April.