Mexico: Manufacturing PMIs diverge but remain in dire conditions amid Covid-19 blow
June 1, 2020
The seasonally-adjusted manufacturing Purchasing Managers’ Index (PMI) produced by the Mexican Institute of Financial Executives (IMEF) fell deeper in negative territory from 41.0 in April to 39.2 in May. The result marked the lowest reading on record and signaled a sharper contraction of the manufacturing sector. Plummeting new orders and a marked decline in production drove the indicator’s fall.
In contrast, the seasonally-adjusted manufacturing PMI produced by IHS Markit bounced back to 38.3 in May from 35.0 in April, which had marked the lowest print in over nine years of data collection. Despite the increase, the index pointed to a further marked deterioration of business conditions in the manufacturing sector. May’s climb was driven by softer declines in production and new orders, though they were still steep as factories suspended operations amid Covid-19 containment measures. Moreover, due to weak new business inflows and limited production capacity, manufacturers continued to cut their staff numbers in May.
Author: Javier Colato, Economist