According to a poll issued on Monday, the manufacturing sector in Mexico increased for the second consecutive month in March, with employers adding more workers and input cost inflation falling to its lowest level in 1 1/2 years.
The seasonally adjusted S&P Global Mexico Manufacturing Purchasing Managers’ Index (MXPMIM=ECI) remained unchanged from February at 51.0 in March, suggesting growth rather than contraction.
According to Pollyanna De Lima, assistant director of economics at S&P Global Market Intelligence, “additional gains in new orders and employment in March bode well for the near-term outlook for production, which might rebound in the subsequent quarter if demand conditions continue to strengthen.”
In addition, she said, “For the time being, PMI statistics continued to indicate a substantial degree of output stability.”
Beginning in March 2020, Mexico’s industrial sector will decrease for over two and a half years due to the COVID-19 outbreak. The index reached a record low of 35.0 in April of 2020, when widespread fear of a pandemic was at its peak.
“Inflation had less of an effect on industry performance. With input costs increasing at the slowest rate in more than a year and a half and less pressure on supply networks, firms raised their input purchases in March “De Lima added.
The annual headline inflation rate in Mexico, the second-largest economy in the area, declined to 7.12% at the beginning of March, from 7.48% in the second half of the previous month.
De Lima said that “poll respondents were confident that price constraints will ease more over the next 12 months, therefore increasing output growth.”
