MexECON Blog

September PMI Rises to 52.4

Mexico's September purchasing managers index (PMI) for the manufacturing sector rose to a seasonally-adjusted 52.4, compared with revised readings of 52.2 in August and 51.6 in July.  The reading for September was the strongest since May.  According to the report, the rise in September came mostly from a second straight increase in the subindex on new orders.  That subindex rose to a six-month high of 54.7, after a reading of 54.1 in the previous month.  The subindex on supplier deliveries also rose, reaching a four-month high of 45.9.  The subindex on factory employment was unchanged at 51.4.  In contrast, the September subindex on production edged down to 54.3 from 54.5 previously, and the subindex on deliveries fell back to 51.9 from 53.6.

The report was released on Friday 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 suggests Mexico's factory sector is again growing relatively broadly.  The manufacturing sector is benefitting from both a rebound in Mexican exports and a budding recovery in the domestic construction sector after a long period of extreme weakness.  The main economic headwind is the relatively soft labor market, which continues to weigh on consumer spending and overall economic growth.

Patrick Fearon, CFA
Vice President, Fund Management

PMI 1409

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