Mexico PMI December 2020


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.

According to the LatinFocus Consensus Forecast panel, industrial output will increase 4.5% in 2021, which is up 0.3 percentage points from last month’s forecast. In 2022, our panel sees industrial output growing 2.7%.

Author:, Economist

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Mexico PMI Chart

Mexico PMI December 20 20 0

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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