LOCAL ECONOMIC SNAPSHOT | REMITTANCES
Money to Mexico rises amid recovery
By HANAH CHO
Staff Writer [email protected]
The U.S. economic recovery is fueling a revival of remittances to Mexico. Money sent home by Mexicans living in the U.S. and abroad rose in 2011 after a three-year slump. Mexico’s remittances peaked in 2007 before falling in 2008 amid the U.S. recession before plunging further in 2009 and 2010.
On the upswing: Mexican-bound remittances and the U.S. economy
Remittances to Mexico are bouncing back as the U.S. economy slowly recovers. Remittances track two economic indicators. One is the Conference Board’s coincident index, which reflects economic conditions. The other is the index of U.S. construction employment, which is a major source of jobs for Mexicans.
Conference Board Coincident Economic Index, U.S. U.S. construction employment index Index, January 2000=100 120 Recession 115 Recession
A statistical one-month spike in reported remittances in fall 2008 was caused by volatile dollar-to-peso valuations during the financial collapse.
Remittances (in billions of dollars) $3
105 $2 100
90 $1 85
80 $0.5 75
NOTE: 2012 figures are through June.
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
NOTE: Remittances have been adjusted for inflation and seasonal factors. SOURCES: Federal Reserve Bank of Dallas, with data from the Bank of Mexico; the Conference Board; and the U.S. Bureau of Labor Statistics
Top 10 remittance receiving countries, 2011 (estimate)
Mexico ranks third in money inflows behind India and China.
(Amount received in remittances in billions of dollars)
Top 10 remittance originating countries, 2010 (most recent year available)
The U.S. ranks far ahead in the amount of remittances sent abroad.
(Amount sent in remittances in billions of dollars)
India China Mexico Philippines France Egypt Pakistan Germany Bangladesh Belgium
SOURCE: World Bank
$63.7 $62.5 $23.6 $22.9 $16.4 $14.2 $12.3 $12.1 $11.9 $10.9
U.S. Saudi Arabia Switzerland Russia Germany Netherlands Spain Italy Kuwait South Korea $27.1 $21.6 $18.8 $15.9 $12.9 $12.2 $12.2 $11.8 $11.4
The bottom line
“We definitely see an uptick in remittances right now. The construction industry in the U.S. has been better than we’ve expected, and a lot of Mexican nationals work in that industry. If that’s getting better, they’re getting paid again or they’re hired back, and they’re sending remittances to their home country.” Jesus Cañas, associate economist, Federal Reserve Bank of Dallas “Remittances to Mexico have recuperated, and Mexico continues to be one of the largest money transfer markets in the world. Due to its high Hispanic population, Texas is an important send state for remittances to Mexico. In fact, MoneyGram had a 19 percent transaction growth to Mexico in the first two quarters.” Robert Burford, Mexico regional director, MoneyGram International “Remittances to Mexico in the first six months of 2012 outpaced the money flow in the same period last year. Mexico received almost $11.8 billion in the first half of this year. If the pace continues, remittances to Mexico this year will top 2011.”
Hanah Cho, staff writer, The Dallas Morning News