Mexico factories back in growth territory as challenges abound, reports Reuters
Mexico’s manufacturing sector inched back into expansion territory in September, following two months of contraction, as goods producers faced a challenging month due to ongoing declines in sales and cashflow concerns, a survey showed on Monday.
The seasonally adjusted S&P Global Mexico Manufacturing Purchasing Managers’ Index (MXPMIM=ECI) increased to 50.3 in September, up from 48.5 in August 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 pandemic. The index hit a record low of 35.0 in April 2020 during the height of the country’s COVID-19 lockdowns, but then briefly popped back into growth territory in May and June of this year.
The latest survey underscored that “solely” due to job creation and lengthening delivery times, the index was above the 50 mark, while the overall reading for the third quarter of 49.1 was in contraction territory.
The manufacturing sector was negatively impacted by a triple whammy of demand, supply and financial setbacks in September,” said Pollyanna De Lima, Economics Associate Director at S&P Global Market Intelligence.
September data suggested challenging economic conditions globally led to back-to-back declines in international sales at Mexican manufacturers and some of those surveyed mentioned the deferral of orders coming from the United States.