MexECON Blog

February PMI Falls Modestly

Mexico's February purchasing managers index (PMI) for the manufacturing sector fell back to a seasonally-adjusted 52.8, after surging to 53.1 in January.  Nevertheless, the index remained well above its December reading of 52.2.  According to the report, the fall in February stemmed from weaker readings in three of the five subindexes.  The heavily-weighted subindex on new orders dropped to 54.1, compared with 54.6 in January.  The subindex on employment fell to 51.4 from 52.1, and the subindex on supplier deliveries pulled back to 46.4 from 47.1.  In contrast, the February subindexes on production and inventories posted modest increases.

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.  In spite of its modest retreat in February, the index still suggests the Mexican factory sector is growing broadly again in early 2015.  With the U.S. economy continuing to expand and the peso remaining weak, Mexican exports have been trending upward, even though they cooled a bit in recent months.  Some of Mexico's domestic sectors are also growing well, offering a further boost to manufacturers.  Because of these trends, the country's factory sector looks set to continue growing well for the time being.

Patrick Fearon, CFA
Vice President, Fund Management

PMI 1502

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