Later today we will be publishing a story on steel prices within the Mexican market place and how they could potentially affect US buyers. With markets going haywire I like to check in with our contacts in other countries to “get the lay of the land,” so to speak. So when I caught up with German Dominguez, our man on the ground in Mexico this past Friday, he shared some anecdotal stories that ought to make us a little nervous. The first relates to a company in the automotive industry with operations in Mexico. Apparently, that operation is “forward producing” because they don’t know what is going to happen next year. The operation is planning a partial shut down during 2009 for a couple of months until the economic situation improves. In addition, German has noted an increase in the number of production supervisors looking for work, symptomatic of maquiladoras shutting down production lines and plants. Four auto plants alone have shut down in Juarez.
With that industry on hold, hiring has also come to a grinding halt. Many companies are also slowing down purchases until at least December to see if the Mexican Peso currency issue is resolved. This of course also means no new investments, no new products and little product development.
One of our clients in the US mentioned that their CFO measures email volume within his company and not surprisingly, email numbers are down recently. The theory is more emails means more business activity. As they say, let’s wait for the numbers.