By Adina Moloman
Sources: HSBC Purchasing Managers’ IndexTM 2014; The Manufacturers Alliance for Productivity and Innovation (MAPI)
Mexico is a global manufacturing leader with competitive multinationals corporations and cutting-edge manufacturing plants and is getting larger, more efficient and very competitive every year.
According to HSBC Purchasing Managers’ Index (PMI) there is an optimistic start to 2014 for Mexico Maquiladora Industry, with production volumes and new business intakes both rising at higher rates comparing to other variables that PMI is analyzing.
The PMI is considering five variables: tracking changes in new orders, output, employment, suppliers’ delivery times and stocks of purchases. The data for the index is based on answers to questionnaires from purchasing executives from around 300 companies Manufacturing in Mexico.
According to the index there is little improvement on employment levels, which is generally sufficient to meet production requirements.
The index is showing a higher production level that basically is responding to a higher demand from the US and Western Europe.
According to a report from The Manufacturers Alliance for Productivity and Innovation (MAPI), a higher production level is explained by the increasing activity of the Mexico auto manufacturing sector and the related supplying industries, such as basic metals, rubber and plastics, fabricated metals, and nonmetallic minerals.
The improvement in new business volumes for Q1 of 2014 is the result of several auto investments in Mexico in recent months, since Volkswagen, Audi, Chrysler, Ford, General Motors, Honda, Mazda, Nissan were all expanding their Mexican operations or installing new operations.
The index is suggesting a continued output growth over the next six months, but very much depending on the performance of U.S. manufacturing. MAPI forecasts are mentioning acceleration in the general U.S. economy and a rebound in both US and Mexico manufacturing production in the second half of 2014.