Mexico's factories edge towards growth after 17-month contraction
Reuters
Published Aug 02, 2021 10:37AM ET
MEXICO CITY (Reuters) - Mexico's factories showed tentative signs of a recovery in July, deteriorating at their slowest pace in the current 17 month-on-month string of contractions, a survey showed on Monday.
The IHS Markit Mexico Manufacturing Purchasing Managers' Index rose to 49.6 in July from 48.8 in June, the highest reading since February 2020 and marginally below the 50 threshold that separates growth from contraction.
The index has been clawing its way higher gradually after plummeting to 35.0 in April 2020 amid the fallout from the coronavirus pandemic, in what was by far the lowest reading in the survey's 10-year history.
"It is encouraging to see the headline PMI stir closer to the critical 50.0 threshold and some reports of rising sales among Mexican manufacturers," said Pollyanna De Lima, economics associate director at IHS Markit.
Some firms indicated that production fell due to raw material shortages, the pandemic and low sales, but the drop was curbed by rising output at companies that noted increases in new projects.
"The sector was again impacted by bottlenecks at global logistic firms, with raw material shortages and delivery delays leading to rising backlogs of work, declines in stocks and a substantial increase in overall input costs," De Lima said.
According to the survey, businesses turned more optimistic regarding the 12-month outlook for production, with the overall degree of confidence at the strongest level in 1-1/2 years and firms anticipated a pick-up in sales and improved raw material availability.
Job losses were also the slowest in 1-1/2 years.
Mexico's President Andres Manuel Lopez Obrador in mid-June forecast that the economy would reach pre-pandemic levels by the third quarter of this year, after gross domestic product contracted by some 8.5% last year.
Get The News You Want
Written By: Reuters
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.