MexECON Blog

December PMI Falls to 52.0

Mexico's December purchasing managers index (PMI) for the manufacturing sector fell to a seasonally-adjusted 52.0, compared with revised figures of 52.3 in November and 52.1 in October.  According to the report, the modest decline in December reflected lower readings for the heavily-weighted subindexes on new orders and production.  The subindex on new orders edged down to 54.4 from 54.6 in November.  The subindex on production fell to 53.7 from 55.1.  In contrast, the subindexes on factory employment, supplier deliveries, and inventories all posted modest gains in December.

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.  The index is now at its lowest level since last July, but it still high enough to suggest that the Mexican manufacturing sector is continuing to grow at a modest pace, just as it has for the last year.  The sector continues to benefit from stronger demand from the United States and an ongoing rebound in important parts of the domestic economy.  Importantly, the continued expansion in factory employment suggests that the Mexican labor market is likely to keep strengthening gradually, which should eventually help prompt stronger consumer confidence and spending.  In turn, that would help solidify Mexican economic growth.

Patrick Fearon, CFA
Vice President, Fund Management

PMI 1412

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