The tertiary sector has been one of the most affected parts of the Mexican economy, seeing a wide variation in performance across activities (figure 4). As economic activity picked up pace in the United States, so did the manufacturing output of Mexico (especially the automotive sector), with many industries reaching their prepandemic production levels. The gradual reopening of the economy and normalization of trade flows between the United States and Mexico have helped a faster recovery in manufacturing compared to the rest of the economy (figure 3). However, by October, automobile production had reached 347,000 units. 2 In the automotive industry, for example, production of cars went from 320,000 units in January to only 3,000 units in April-a fall of almost 100%. Additionally, the lockdown also reduced output across industries such as automotive and electronics, among others. Manufacturing, one of the main drivers of growth in the past decade, registered a significant decline in output as the restrictions imposed due to the pandemic curtailed demand, both at home and abroad. Manufacturing and services: Diverging paths to recovery Above all, due to the lack of fiscal support and the resurgence of COVID-19 cases, which will affect production and employment once again, the road to recovery will be fraught with uncertainty. The sharp fall in the economy observed this year will have a smaller carry-forward effect in 2021-a year the world will be excited to see the arrival of COVID-19 vaccines, but also one that faces great challenges. This exemplifies how, despite the recovery, working conditions have become more precarious in the country.
Besides, the number of people working part-time hours had doubled to 15.7% in October compared to 7.5% in January.
The vast majority of those who are reintegrating with the labor force are joining the informal market. Nevertheless, there are other factors to consider. 1 By now, partial recovery of the Mexican economy has helped bring 10.2 million back to work while nearly 2.3 million workers have yet to return (figure 2). The pandemic shrunk the size of the economically active population from 60.5% in February to 47.5% in April.
Between April and May this year, 12.5 million people left the labor force and unemployment rose to 4.5%, up from 3.3% in March. The pandemic has also had a substantial effect on the Mexican labor market.
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