MexECON Blog

September PMI Rises to 53.4

In a report Monday, Mexico's September purchasing managers index (PMI) for manufacturing rose to a seasonally-adjusted 53.4, up from a revised 52.4 in August but still below the July reading of 54.6.  According to the report, from Banco de México and the national statistics agency INEGI, the rebound in September came entirely from the heavily-weighted subindexes on new orders and production.  The subindex on new orders rose to 55.2, compared with 54.4 in August and 56.8 in July.  The subindex on production rose to 54.9, after 52.8 in August and 59.2 in July.  The subindexes on manufacturing employment, supplier deliveries, and inventories all fell modestly.

Comment:  The PMI is designed so that readings over 50 point to expanding activity.  The report for September therefore suggests Mexico's manufacturing sector is still growing broadly.  In fact, Mexico's PMI continues to outperform most other countries' indexes.  In the United States, the September index rose only to 51.6, while in the Eurozone, the index fell to a 25-month low of 48.5.  In Asia, several key PMI indexes were below 50 in September, including one for China.  Despite this relative outperformance, however, slowing economic growth abroad is likely to weigh on Mexican manufacturing at some point.  Risks are weighted to the downside, and an outright decline in Mexican factory activity cannot be ruled out in the coming months.

Patrick Fearon, CFA
Vice President, Fund Management

                                                      Mexico's Manufacturing PMI
                                             Seasonally Adjusted, >50 = Expansion
                                                 Source:  Banco de México and INEGI
PMI 1109

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