MexECON Blog

April PMI Falls to 52.7

Mexico's April purchasing managers index (PMI) for the manufacturing sector fell to a seasonally-adjusted 52.7, after revised readings of 53.7 in March and 53.3 in February.  The decline in April came in large part from a drop in the heavily-weighted subindex on new orders.  That subindex fell sharply to 54.0 from 57.1 in March.  Likewise, the subindex on production declined to 54.2 in April from 55.8 in the previous month.  The subindexes on employment and inventories both declined to their weakest levels in more than a year, with the former coming in at 51.4 and the latter coming in at 50.2.  However, those indexes both have relatively low weights.  The subindex on supplier deliveries rebounded to 48.5 from 44.4 in March, but it also has a relatively low weight.  The report was released today by Banco de Mexico and the official statistics agency INEGI.

Comment:  The PMI is designed so that readings over 50 point to expanding activity.  At its current level, the index therefore suggests Mexico's factory sector is still growing fairly broadly.  Some sectors of the Mexican economy are clearly rebounding from their soft spot at the turn of the year.  Moreover, recent data show the U.S. economy is continuing its gradual recovery.  Taken together, these developments suggest Mexico's economy, and its manufacturing sector in particular, will continue to grow in the months ahead, though perhaps not as robustly as during the extraordinary boom period of the last three years.

Patrick Fearon, CFA
Vice President, Fund Management

PMI 1304

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