RSS   Newsletter   Contact   Advertise with us

Manufacturing in Mexico improves fast

Staff writer ▼ | December 4, 2013
Business conditions in Mexico's manufacturing sector improved at the fastest pace in eight months in November, though only modestly. This reflected a return to growth for output and the strongest increase in new orders since March, which manufacturers linked to greater client demand.
Manufacturing in Mexico
Manufacturing in MexicoBusiness conditions in Mexico's manufacturing sector improved at the fastest pace in eight months in November, though only modestly. This reflected a return to growth for output and the strongest increase in new orders since March, which manufacturers linked to greater client demand.


Concurrently, firms hired more staff, but the increase in headcount was marginal and merely reversed job losses in October.

The headline figure derived from the survey is the Manufacturing Purchasing Managers' Index (PMI). Readings above 50.0 signal an improvement in business conditions on the previous month, while readings below 50.0 signal a deterioration. The PMI is composed of five sub-indices tracking changes in new orders, output, employment, suppliers' delivery times and stocks of purchases.

After adjusting for seasonal variation, the HSBC Mexico Manufacturing PMI rose to its highest level in eight months during November. At 51.9, up from 50.2 in October, the PMI signalled that manufacturing business conditions improved modestly, although at a rate slower than the series average (53.6).

The volume of new orders received by Mexican manufacturers rose moderately and at the fastest pace in eight months during November. Firms largely link ed this to greater client demand in both domestic and international markets, with new export work in particular rising at the strongest pace for over a year.

Firms raised production in light of higher new order requirements. Although modest, the increase in output more than reversed a reduction in October. Concurrently, stocks of finished goods rose at the fastest pace since January, while backlogs of work were depleted for the second month running.

Reflective of higher production, the quantity of inputs bought by Mexican manufacturers increased in November. Input inventories also rose, with the rate of stock accumulation the fastest in 2013 to date. Meanwhile, suppliers' delivery times lengthened for the second month running. The latest deterioration in vendor performance was the greatest since June.

Manufacturing employment in Mexico increased in November, with over 11% of surveyed companies hiring additional staff since October. However, the rate of job creation was only marginal and merely reversed job losses in the previous survey period.


 

MORE INSIDE POST