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Mexico: PMI rises and points to stronger growth in manufacturing sector

November 3, 2014

The Mexican Institute of Finance Executives’ (IMEF) seasonally-adjusted manufacturing indicator rose from a revised 53.1 points in September (previously reported: 52.7 points) to 54.8 points in October. October’s result overshot the 53.0 points the markets had expected and marked the highest level since June 2012. Consequently, the index moved further away the 50-point threshold that separates expansion from contraction in manufacturing.

The indicator in October showed a broad-based improvement and details were generally upbeat. The sub-component referring to new orders rose to the highest level in more than two years and employment jumped to a seven-month high. Conversely, the sub-gauge of output levels was unchanged over the previous month, while inventories rose slightly in October. Meanwhile, the sub-indicator related to supplier deliveries jumped to its highest level since May 2008. Analysts recognized that the notable improvement in the IMEF manufacturing indicator reflects solid growth in the manufacturing sector and now is better aligned with other related data—automobile production and U.S manufacturing output. In October, the ISM manufacturing index recovered the ground lost in September and rose to 59.0.

Another gauge that measures performance in the Mexican manufacturing sector also showed an improvement. The Purchasing Managers’ Index (PMI) elaborated by HSBC rose from 52.6 in September to 53.3 in October, which hit the highest point in nine months. HSBC noted that the PMI picked up in October, “supported by rises in new orders and production sub-indices. This month’s manufacturing PMI suggests that industrial activity will continue to support economic recovery in the coming months.”

LatinFocus Consensus Forecast panelists expect Mexican industrial production to increase 2.4% in 2014, which is up 0.1 percentage points over the previous month’s projection. LatinFocus panelists see industrial production expanding 3.8% in 2015, which is up 0.2 percentage points over the previous month’s projection.


Author:, Senior Economist

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Mexico PMI October 2014

Note: Composite index in the manufacturing report on business (PMI) for the U.S. and seasonally-adjusted manufacturing index for Mexico. HSBC Manufacturing PMI. 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), Mexican Institute of Financial Executives (IMEF, Instituto Mexicano de Ejecutivos de Finanzas) and HSBC.


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