Mexico: Manufacturing sentiment edges down again in March
April 1, 2013
The seasonally-adjusted IMEF manufacturing index edged down from a revised 52.4 points in February (previously reported: 52.1 points) to 52.2 points in March. The figure, which came in below market expectations, represents the lowest level in four months. That said, the index remains above the 50-point threshold, which indicates that the manufacturing sector is expanding.
Two out of the five sub-categories that compose the index were responsible for March's moderation, in particular employment, which has now dropped to its lowest level in 18 months. In contrast, new orders, production and inventories improved over the preceding month.
Meanwhile, in the United States, the ISM manufacturing index dropped to 51.3 points in March from 54.2 points in February. The reading, also above the 50-point threshold, indicates that the sector continues to expand albeit at a slower pace. Given the significant cross-border integration of the manufacturing sector, the deceleration in U.S. manufacturing activity does not bode well for Mexican industrial output going forward.
LatinFocus Consensus Forecast panellists anticipate Mexican industrial production to increase 3.5% this year, which is unchanged over the previous month's projection. For next year, panellists see industrial production expanding 4.0%.