Mexico: Confidence in manufacturing sector improves for second straight month
September 2, 2013
The seasonally-adjusted manufacturing index produced by the Mexican Institute of Finance Executives (IMEF) rose to 49.3 points in August (July: 48.8 points), but fell short of market expectations that saw the index reaching 50.0 points. Although the reading marks a second consecutive month of improvement in the index, it remains below the 50-point threshold that indicates a contraction in the manufacturing sector.
The increase in confidence over the previous month was broad-based. Supply deliveries saw the biggest increase in August, reaching both expansion territory and the highest level in more than two years. In addition, confidence in new orders and production rose to a four-month high, while inventories edged down compared to the previous month.
Meanwhile in the United States, the ISM manufacturing index rose from 55.4 points in July to 55.7 points in August. Building on the strong monthly increase, the index reached its highest level in over two years, which bodes well for Mexico in the coming months.
LatinFocus Consensus Forecast panelists expect Mexican industrial production to increase 2.2% this year, which is down 0.3 percentage points over the previous month's projection. Panelists see industrial production expanding 4.1% in 2014.
Author: Ricardo Aceves, Senior Economist