© Reuters. FILE PHOTO: A normal view reveals the doorway to a Panasonic manufacturing facility in Tijuana, Mexico December 3, 2019. REUTERS/Jorge Duenes/File Photograph
MEXICO CITY (Reuters) – Mexico’s manufacturing sector expanded for a 3rd straight month in November, selecting up its tempo of development barely, as tentative indicators pointed to a restoration in demand situations, general gross sales stabilized and jobs had been created, a survey confirmed Thursday.
The seasonally adjusted S&P International (NYSE:) Mexico Manufacturing Buying Managers’ Index was 50.6 in November, up from 50.3 in October, and above the important thing 50-threshold that separates development from contraction.
Mexico’s factories shrank for greater than 2-1/2 years beginning in March 2020 because of the financial fallout of the COVID-19 pandemic. The index hit a report low of 35.0 in April 2020 throughout the peak of the nation’s pandemic-related lockdowns.
“The most recent outcomes highlighted hesitant indicators of a restoration in demand for Mexican items, as firms largely absorbed extra value burdens and avoided mountaineering promoting fees the place attainable to attempt to enhance gross sales,” mentioned Pollyanna De Lima, Economics Affiliate Director at S&P International Market Intelligence.
November’s above 50.0 determine primarily stemmed from an enchancment within the development for gross sales and stronger jobs creation, the survey mentioned, including that whereas inflationary pressures subsided barely, enter prices nonetheless rose at a pointy fee.
Mexico’s annual shopper costs slowed greater than anticipated throughout the first half of November, hitting 8.14% within the interval, down from 8.53% a month earlier. Nonetheless, core inflation index – which stays a predominant concern in Mexico because it grapples with excessive prices – got here in above market forecasts.
“Inflationary pressures waned in November, however panelists continued to report will increase for a variety of uncooked supplies. Whereas the speed of enter value inflation remained traditionally excessive, promoting costs rose on the slowest tempo in a yr,” De Lima added.
The survey confirmed that companies had been barely extra upbeat in regards to the future, however they exercised warning concerning enter shopping for, manufacturing, inventories and headcount.
“Exterior demand remained a key supply of weak point, evidenced by one other fall in exports, which companies attributed to difficult financial situations globally and decrease new orders from the U.S.,” mentioned De Lima.