MexECON Blog

November PMI Rises to 52.5

Mexico's November purchasing managers index (PMI) for the manufacturing sector rose to a seasonally-adjusted 52.5, up from a revised 52.1 in October but equal to the reading for September.  According to the report, the rebound in November reflected increases in four of the five subindexes.  The heavily weighted subindex on new orders rose to 55.0, after dipping to 54.4 in the previous month.  The subindex on production rose to 55.1, marking its second straight monthly gain.  The subindex on inventories jumped to 52.7, and the subindex on supplier deliveries rose to 45.2.  The only subindex to post a decline in November was the one on manufacturing employment.  That subindex edged down to 51.6, compared with 51.8 in October and 51.4 in September.

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 suggests the Mexican manufacturing sector continues to grow at a good pace.  Indeed, growth in the sector has been quite stable in recent months, probably owing to the continued strengthening in Mexico's exports and an ongoing rebound in some aspects of domestic demand.  The slight slowdown in manufacturing employment during November is a bit of a concern, since a relatively soft labor market has been a headwind for the Mexican economy.  Nevertheless, factory employment is still growing, and if it continues to grow at a decent pace, it should eventually help prompt stronger consumer confidence and spending.

Patrick Fearon, CFA
Vice President, Fund Management

PMI 1411

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