Mexico's factories grow again amid sales improvement, job creation

Reuters

Published Dec 01, 2022 11:14AM ET

Updated Dec 01, 2022 11:24AM ET

MEXICO CITY (Reuters) - Mexico's manufacturing sector expanded for a third straight month in November, picking up its pace of growth slightly, as tentative signs pointed to a recovery in demand conditions, overall sales stabilized and jobs were created, a survey showed Thursday.

The seasonally adjusted S&P Global (NYSE:SPGI) Mexico Manufacturing Purchasing Managers' Index was 50.6 in November, up from 50.3 in October, and above the key 50-threshold that separates growth from contraction.

Mexico's factories shrank for more than 2-1/2 years starting in March 2020 due to the economic fallout of the COVID-19 pandemic. The index hit a record low of 35.0 in April 2020 during the height of the country's pandemic-related lockdowns.

"The latest results highlighted hesitant signs of a recovery in demand for Mexican goods, as companies mostly absorbed additional cost burdens and refrained from hiking selling charges where possible to try and boost sales," said Pollyanna De Lima, Economics Associate Director at S&P Global Market Intelligence.

November's above 50.0 figure mainly stemmed from an improvement in the trend for sales and stronger jobs creation, the survey said, adding that while inflationary pressures subsided slightly, input costs still rose at a sharp rate.

Mexico's annual consumer prices slowed more than expected during the first half of November, hitting 8.14% in the period, down from 8.53% a month earlier. Still, core inflation index - which remains a main concern in Mexico as it grapples with high costs - came in above market forecasts.