Mexico’s factories end 2022 on firmer footing, grow for 4th straight month
MEXICO CITY — Mexico’s manufacturing sector expanded for a fourth straight month in December, growing at its fastest pace since June, with a further increase in new orders underpinning a renewed upturn in production and input buying, a survey showed Monday.
The seasonally adjusted S&P Global Mexico Manufacturing Purchasing Managers’ Index was 51.3 in December, up from 50.6 in November, 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.
“December’s PMI figure was encouragingly the best we’ve seen for six months, as firms scaled up production for the first time since June due to back-to-back increases in factory orders,” said Pollyanna De Lima, economics associate director at S&P Global Market Intelligence.
“Hence, manufacturing will enter 2023 on a much better footing than it did in 2022,” De Lima said.
The survey showed sustained job creation, with growth ticking higher, while rates of inflation for both input costs and output charges moderated at the end of 2022.
While input cost inflation remained high, the latest increase was the slowest in ten months.
Mexico’s headline inflation rebounded in the first half of December after six fortnights of slowing, while the core inflation index, which strips out volatile food and energy products and had been on a stubborn upwards cycle, finally started to creep down.
De Lima said that the sustained rise in new business was insufficient to improve optimism among goods producers.
“Companies remained worried about automotive sector weakness, component shortages, a lack of investment, the war in Ukraine and inflation,” said De Lima. (Reporting by Anthony Esposito, Editing by Chizu Nomiyama)
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