MexECON Blog

May PMI Rises to 52.9

Mexico's May purchasing managers index for the manufacturing sector rose to a seasonally-adjusted 52.9, up from a revised 52.6 in April.  The rise in the May PMI came mostly from a jump in the heavily-weighted subindex on new orders, which rose to 55.9 from 54.3 in the previous month.  The subindex on employment rose to 51.7 from 51.5, and the subindex on inventories edged up to 50.8.  The subindex on production was unchanged at 54.2.  The only subindex to post a decline in May was the one on supplier deliveries.  That subindex declined to 45.7 from 47.3 in April.

The report was released today by Banco de México 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.  Mexico's manufacturing sector softened sharply at the turn of the year, along with several other sectors, but there are signs that the economy is at least partially accelerating again.  As long as U.S. demand continues rise, and as long as there are no new flare ups in the European debt crisis, the Mexican economy is likely to continue growing at a decent but not spectacular pace in the coming quarters.

Patrick Fearon, CFA
Vice President, Fund Management

PMI 1305

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