Mexico: Manufacturing PMIs climb at the start of 2021 though remain fragile
February 2, 2021
The seasonally-adjusted manufacturing Purchasing Managers’ Index (PMI) produced by the Mexican Institute of Financial Executives (IMEF) jumped from 48.8 points in December 2020 to 50.2 points in January, marking the highest reading since May 2019. Thus, it landed above the critical 50-point threshold, the first time in 20 months, indicating a marginal expansion of the manufacturing sector. January’s upturn was mainly driven by a bounce back to growth in new orders and production, while employment fell at a softer pace than in December.
Similarly, the seasonally-adjusted manufacturing PMI produced by IHS Markit climbed from 42.4 in December to 43.0 in January. Nevertheless, it remained well below the 50-threshold, pointing to another sharp deterioration of business conditions in the manufacturing industry. New export orders declined at a softer pace compared to December. That said, the magnitude of the drop remained stark, with output also being scaled back as the pandemic, downbeat demand and business closures weighed heavily on overall conditions. Meanwhile, although firms remained optimistic, they were less so than in the previous month.
Author: Javier Colato, Economist