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SOUTHLAND PREVIEW / The Business Week Ahead

Southland

October 16, 1995|Times Staff Reports

The Peso Predicament: The Mexican peso crisis has clobbered a variety of Southern California export businesses, from lumber, processed food and fertilizer manufacturers to housing, engineering and fitness franchise companies. Are things getting any better? Some clues will be presented Wednesday when the Commerce Department releases August trade figures. The peso is so weak that Mexican consumers cannot afford the U.S. products they were snatching up with gusto before the devaluation hit last December. As a result, the U.S. trade surplus with Mexico ($8.9 billion as of July, 1994) has become a deficit ($1.7 billion as of last July). The imbalance is a big reason the United States has chalked up an alarming $73.6-billion overall trade deficit through July, a stunning 21.3% increase from 1994. The peso strengthened over the summer but tumbled again this month, leaving economists pessimistic about any short-term improvement.

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