MAPI’s 2012 predictions for manufacturing production growth in Latin America were revised downward to 3.1 percent (from the previous 4.4 percent estimate) as a result of an ongoing recession among Brazilian factories and a major slowdown in Argentina that offsets Mexico’s solid performance. Manufacturing activity in Brazil and Argentina is suffering from softer domestic demand as well as from inflation-adjusted exchange rate appreciations that are hurting competitiveness, discouraging exports, and motivating foreign-made goods. Mexico’s manufacturers are in relatively better shape, benefiting from strong U.S. demand and resilient domestic demand. We expect our index to grow 4 percent in 2013 as Brazil’s manufacturing output rebounds on the heels of government incentives that will bolster demand.