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Mexico: PMI improves in May; confirms manufacturing strength

June 2, 2014

The manufacturing indicator—adjusted for seasonality—elaborated by the Mexican Institute of Finance Executives (IMEF) rose from a revised 51.9 points (previously reported: 51.1 points) to 52.2 points in May. The increase was on par with market expectations. The index is still above the 50-point threshold that separates expansion from contraction in the manufacturing sector, proving that the sector remains strong.

May’s improvement was broad-based as almost all sub-categories that comprise the index increased: New orders, production levels and employment rebounded to the levels last seen in March. In addition, the inventories sub-category jumped to its highest point in nearly two years. Conversely, the supply-deliveries sub-gauge fell over the previous month and fell below 50 points, which indicates contraction.

The Mexican manufacturing sector is strongly linked to the manufacturing sector in the United States, where the ISM manufacturing index slowed in May. The indicator fell to 53.2 points, down from the 54.9 points in April. The decrease tempered hopes of a strong pick-up in the U.S. manufacturing sector.

LatinFocus Consensus Forecast panelists expect Mexican industrial production to increase 2.9% in 2014, which is down 0.1 percentage points over the previous month’s projection. Panelists see industrial production expanding 3.9% in 2015.


Author:, Senior Economist

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Mexico PMI May 2014

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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