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Mexico’s manufacturing sector expands for second straight month


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MEXICO CITY — Mexico’s manufacturing sector expanded for a second straight month in June after being stuck in negative territory for more than 2-1/2 years, pointing to tentative signs of a recovery in demand for the country’s goods, a survey showed on Friday.

The seasonally adjusted S&P Global Mexico Manufacturing Purchasing Managers’ Index increased to 52.2 in June from 50.6 in May.

Prior to the May reading, the PMI had remained below the key 50-threshold that separates growth from contraction since March 2020. It hit a record low of 35.0 in April 2020 during the height of the country’s COVID-19 lockdowns.

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June’s data showed a rise in factory orders and a marginal uptick in sales that led businesses to scale up production, lift input buying and continue hiring.

Importantly, for the first time since the onset of the pandemic, manufacturing output rose, the latest survey showed.

“Improved demand conditions, particularly from external markets, paved the way for Mexican manufacturers to take a step in the right direction towards a recovery in June,” said Pollyanna De Lima, economics associate director at S&P Global Market Intelligence.

Supply chain issues, however, persisted, with the latest results underscoring an intensification of delivery delays and near-record increases in input costs and outstanding business volumes.

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With disruptions to supply chains intensifying, economic growth was somewhat restricted while price pressures remained elevated, De Lima said.

“June data showed one of the strongest increases in input costs in over 11 years of data collection as the war in Ukraine, lockdowns in China and energy price volatility exacerbated lingering disruptions in supply chains,” she added.

Latin America’s leaders have pulled no punches in the battle against high inflation and the region has some of the highest interest rates in the world, with Mexico’s central bank announcing a record rate hike last week. (Reporting by Anthony Esposito; Editing by Paul Simao)



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