Mexico PMI August 2020

Mexico

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.

According to the LatinFocus Consensus Forecast panel, industrial output will plunge 9.3% in 2020. Our panel sees industrial output increasing 3.1% in 2021.


Author:, Economist

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Note: Manufacturing ISM Report on Business (PMI) for the U.S., seasonally-adjusted manufacturing index for Mexico and IHS Markit Manufacturing PMI. Readings above 50 indicate an expansion/improvement in the manufacturing sector while readings below 50 indicate to a contraction/deterioration.
Source: Institute for Supply Management (ISM), Mexican Institute of Financial Executives (IMEF, Instituto Mexicano de Ejecutivos de Finanzas) and IHS Markit.


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