Mexico: Manufacturing PMIs diverge in August but remain in contractionary mode
September 1, 2020
The seasonally-adjusted manufacturing Purchasing Managers’ Index (PMI) produced by the Mexican Institute of Financial Executives (IMEF) slipped from 47.8 in July to 45.0 in August. Thus, it fell further below the 50-point threshold, indicating a sharper contraction of the manufacturing sector. August’s dip reflected a broad-based decline across the index components, with new orders and production in particular falling at faster rates compared to July.
In contrast, the seasonally-adjusted manufacturing PMI produced by IHS Markit edged up from 40.4 in July to 41.3 in August, the highest reading in five months. That said, it remained well below the 50-threshold, pointing to another stark deterioration of business conditions in the manufacturing industry. August’s climb was mainly driven by softer declines in production and workforce numbers, as well as easing pessimism among manufacturers. Nevertheless, overall demand conditions remained subdued as Covid-19 continued to bite.
Author: Javier Colato, Economist