Mexico PMI


Mexico: Manufacturing sentiment rises further in November

December 5, 2012

In November, the seasonally-adjusted IMEF manufacturing index rose to 52.5 points from a revised 52.1 points in October. The figure, which marked a second consecutive increase, drove the index further above the 50-point threshold that indicates that the manufacturing sector is expanding. According to IMEF, the November reading indicates a recovery in manufacturing activity during the final quarter of the year.

Three out of the five sub-categories that compose the index improved over the preceding month, in particular the sub-index related to employment, which reached its highest level in almost two years. In contrast, the sub-index related to supplier deliveries, the only category currently below the 50-point threshold, fell further in November. Meanwhile, manufacturing sentiment in the United States, which is closely related to its Mexican counterpart, dropped 2.2 percentage points to 49.5 points.

The subdued reading surprised the market on the downside, as analysts had expected the index to ease only to 51.4 points, suggesting that manufacturing activity softened in November. Moreover, according to the ISM, "comments from the panel this month generally indicate that the second half of the year continues to show a slowdown in demand" while adding that "respondents also express concern over how and when the fiscal cliff issue will be resolved". The latter bodes ill for a stronger expansion of the Mexican manufacturing sector going forward.


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Mexico PMI Chart

Mexico PMI November 2012

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

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