Mexico: PMI reaches 11-month high in February
March 3, 2014
The seasonally-adjusted manufacturing indicator published by the Mexican Institute of Finance Executives (IMEF) rose from a revised 50.4 points in January (previously reported: 49.7 points) to 50.8 points in February. The result, which slightly overshot the 50.0 points the market had expected, represents the highest level since March 2013. The index remains above the 50-point threshold that separates expansion from contraction in the manufacturing sector.
February's increase mainly reflected a notable improvement in new orders as well as in production levels. In addition, the inventories sub-index jumped to its highest level in 19 months. Conversely, employment dropped over the previous month.
The Mexican manufacturing sector is strongly linked to the manufacturing sector in the United States, where the ISM manufacturing index also increased in February, coming in at 53.2 points (January: 51.3 points). February's increase confirms that the U.S. manufacturing sector got off to a slow start, which does not bode well for the Mexican manufacturing sector in the months ahead.
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