Mexico: Manufacturing PMIs drop further into contractionary territory in December
January 4, 2021
The seasonally-adjusted manufacturing Purchasing Managers’ Index (PMI) produced by the Mexican Institute of Financial Executives (IMEF) inched down to 48.7 in December from 48.9 in November. Thus, it remained below the critical 50-point threshold, where it has been for the past year-and-a-half, indicating a further contraction of the manufacturing sector. December’s dip was primarily driven by a fall in production, with inventories and delivery of products also worsening. Meanwhile, employment declined for the 22nd month running, albeit at a more moderate pace than in November.
Similarly, the seasonally-adjusted manufacturing PMI produced by IHS Markit dropped to a three-month low of 42.4 in December from 43.7 in November. As such, it remained well below the 50-threshold, pointing to another sharp deterioration of business conditions in the manufacturing industry. Both new orders and output fell sharply in December, with surging Covid-19 cases domestically and abroad weighing heavily on the industry. However, businesses turned optimistic towards future output amid hope that the pandemic will recede in the new year.
Author: Stephen Vogado, Economist