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Mexico: PMI strengthens to over-two-year-high in September

October 1, 2014

The seasonally-adjusted manufacturing indicator published by the Mexican Institute of Finance Executives (IMEF) rose from a revised 51.7 points in August (previously reported: 51.6 points) to 52.7 points in September. The reading, which overshot the 52.0 points the market had expected, was the highest on over two years. Moreover, the index is now a bit further above the 50-point threshold that separates expansion from contraction in manufacturing.

The indicator in September showed that details were generally positive, with four of the five components registering gains over the previous month. New orders and production both reached levels not seen in more than two years. Supplier deliveries tallied the largest monthly gain, and employment was the strongest in six months. Inventories was the only category to fall in September.

Analysts suggest that the improvement in the IMEF manufacturing indicator in September reflects a better alignment with hard data showing healthy growth in the manufacturing sector. Meanwhile, in September, the ISM manufacturing index fell to 56.6 from 59.0 in August.

In the same line, the Purchasing Managers’ Index (PMI) elaborated by HSBC rose from 52.1 in August to 52.6 in September, marking the highest level since January. According to HSBC, September’s data reflected a solid improvement in overall business conditions in the manufacturing sector. The reading in September was boosted by the steepest rise in new business orders since January. Nonetheless, new exports orders moderated slightly after having expanded for six months. Employment growth across the manufacturing sector increased for the second month in a row.

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. LatinFocus panelists see industrial production expanding 3.9% in 2015.


Author:, Senior Economist

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Mexico PMI September 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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