Mexico: PMI falls in April after reaching 14-month high in March
May 2, 2014
The seasonally-adjusted manufacturing indicator published by the Mexican Institute of Finance Executives (IMEF) fell to 51.1 points in April from a revised 52.5 points in March (previously reported: 52.7 points), which had represented the highest level since January 2013. The fall in April came as a surprise to the market, which had expected the index to rise to 53.5 points. Despite the fall, the index is still above the 50-point threshold that separates expansion from contraction in the manufacturing sector.
April's fall reflected a drop in almost all sub-categories that comprise the index: new orders, production levels and inventories fell to levels last seen in January. Employment also edged down over the previous month, while supply deliveries was the only sub-category that recorded an improvement in April.
The Mexican manufacturing sector is strongly linked to the manufacturing sector in the United States, where the ISM manufacturing index increased in April. The indicator rose to 54.9 points, up from the 53.7 points recorded in March. The increase confirms that the U.S. manufacturing sector is gradually improving, which bodes well for the Mexican manufacturing sector in the coming months.
LatinFocus Consensus Forecast panelists expect Mexican industrial production to increase 3.3% in 2014, which is up 0.1 percentage points over the previous month's projection. Panelists see industrial production expanding 3.9% in 2015.
Author: Ricardo Aceves, Senior Economist