By Adina Moloman
Sources: FocusEconomics, HSBC Purchasing Managers’ IndexTM 2015
According to the surveys that measure business activity in the Mexican manufacturing sector—the IMEF manufacturing index and HSBC’s PMI—suggested moderated growth in last month. The report is covering the activity in manufacturing for the first and the second quarters.
The latest survey suggests that this year has got off to a relatively soft start for many manufacturers with output picking up in the first few months of 2015. Nevertheless the activity created by entities manufacturing in Mexico has continued to expand for a net balance of companies in the recent month. The HSBC Manufacturing Purchasing Managers Index (PMI) released by the Markit Economics is an early indicator of economic health in the Mexico manufacturing sector. The final HSBC/Markit Purchasing Managers’ Index (PMI) stood at 53.3 in May, above the 50-point level that separates an expansion from a contraction in activity on a monthly basis. The PMI is analyzing month by month the behavior of five sub-indices: orders, output, employment, suppliers’ delivery times and stocks of purchases.
Stronger export sales were the main positive development during the last quarter, alongside a rebound in production and employment growth from first quarter lows.
Strong growth of export sales was attributed to stronger demand from the U.S. and South America, while the employment growth was attributed to successful marketing initiatives and the launch of new products.
Meanwhile, the weaker exchange rate continued to push up the price of imported raw materials, with the rate of cost inflation easing only slightly over the month. Other data suggests rising stocks of finished goods and increased pre-production inventories for the productive sector in Mexico.
The economic outlook for Mexico is moderating for this year since analysts participating in the LatinFocus Consensus Forecast cut Mexico’s 2015 GDP growth forecasts, predicting a rising of 2.8% for the current year and more optimistic for the next one with a rising of 3.4%.