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Mexico: Business activity in manufacturing sector improves further in April

May 4, 2015

In April, the seasonally-adjusted manufacturing indicator elaborated by the Mexican Institute of Finance Executives (IMEF) rose to 51.4 from a revised 50.4 in March (previously reported: 50.2). The indicator, which fell only short of the 51.6 the markets had expected, continues to move in the right direction as it moved further above to the 50-threshold that separates expansion from contraction in business activity in the manufacturing sector.

The silver lining of this month’s result is that the indicator continues signal that the Mexican manufacturing sector is gaining strength after a week start to the year. April’s increase showed improvements in new orders, production and employment levels. Conversely, the sub-categories of supplier deliveries as well as inventories fell over the previous month. Meanwhile, recent data regarding the U.S. manufacturing sector showed that business activity is losing momentum. The ISM manufacturing index in April was unchanged at March’s 51.5. The ISM manufacturing indicator appeared to have bottomed out in April, following the downward trend that began in November 2014.

Another gauge that measures business activity in the Mexican manufacturing sector also showed that growth is gradually picking up momentum. The Purchasing Managers’ Index (PMI) in April, elaborated by HSBC, was unchanged at March’s 53.8. According to HSCB, “the latest survey highlighted a sustained upturn in manufacturing sector business conditions, although growth momentum was still weaker than that seen at the start of 2015.” April’s stable reading showed that export sales and a rebound in manufacturing output were the main positive contributors in April, whereas firms’ assessment regarding increasing prices of imported raw materials continued to be linked to a weaker exchange rate.

LatinFocus Consensus Forecast panelists expect Mexican industrial production to increase 3.6% in 2015, which is unchanged over the previous month’s projection. LatinFocus panelists see industrial production expanding 3.9% in 2016.


Author:, Senior Economist

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Mexico PMI April 2015

Note: Composite index in the manufacturing report on business (PMI) for the U.S. and seasonally-adjusted manufacturing index for Mexico. HSBC Manufacturing PMI. Readings above 50 points indicate an expansion in the manufacturing sector while readings below 50 points indicate to a contraction.
Source: Institute for Supply Management (ISM), Mexican Institute of Financial Executives (IMEF, Instituto Mexicano de Ejecutivos de Finanzas) and HSBC.


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