Mexico: Confidence in manufacturing falls back into contraction territory
November 4, 2013
The seasonally-adjusted manufacturing indicator published by Mexican Institute of Finance Executives (IMEF) fell to 49.3 points in October (September: 50.4 points). The result, which came in below the 50.4 points the market had expected, marked the first fall in the index after three consecutive months of improvement. The index is again below the 50-point threshold that separates contraction from expansion in the manufacturing sector.
October's fall is the result of an across-the-board deterioration. New orders and production levels showed a notable decrease and thus returned to contraction territory. Confidence in employment also deteriorated over the previous month. Supplier deliveries was the only area that edged up in October.
In the United States, the ISM manufacturing index improved slightly, rising from 56.2 in September to 56.4 points in October. The index now sits at its highest level in 30 months, which will bode well for the Mexican manufacturing sector in the coming months.
LatinFocus Consensus Forecast panelists expect Mexican industrial production to increase 1.7% this year, which is down 0.5 percentage points over the previous month's projection. Panelists see industrial production expanding 3.8% in 2014, which is down 0.3 percentage points from last month's forecast.
Author: Ricardo Aceves, Senior Economist