Mexico: Confidence in the manufacturing sector improves in July
August 1, 2013
After falling to its lowest level in four years in June, the seasonally-adjusted IMEF manufacturing index jumped to 48.6 points in July (June: 46.5 points) as expected by the market. Despite the monthly increase, however, the index remains below the 50-point threshold that indicates a contraction in the manufacturing sector.
Confidence increased across-the-board compared to the previous month. Supplier deliveries saw the biggest gain, reaching a seven-month high. That said, only inventories came in above the 50-point threshold; the other four sub-indicators remained under 50 points.
Meanwhile, in the United States, the ISM manufacturing index jumped from 50.9 points in June to 55.4 points in July. Building on the strong monthly increase, the index reached its highest level in over two years, which which bodes well for its Mexican counterpart in the months ahead.
LatinFocus Consensus Forecast panellists expect Mexican industrial production to increase 2.5% this year, which is down 0.6 percentage points over the previous month's projection. For next year, panellists see industrial production expanding 3.9%.
Author: Ricardo Aceves, Senior Economist