Mexico’s November manufacturing PMI falls to lowest in three months

Mexico’s November PMI data underlined a sustained upturn in production volumes as well as in incoming new work throughout the Mexican manufacturing sector, although the expansion rates easing in the months from November and was weaker than seen in the first half of 2016. The Markit Manufacturing PMI for Mexico dropped to 51.1 in November from October’s 51.8. This indicates towards the slowest rebound in business conditions since August.

The November reading is also one of the weakest in the past three years, reflecting relatively weak production and new business growth in November. Manufacturing output rose for the third continuous month but the pace of growth was just marginal and the weakest seen over this period, said Markit.

Survey respondents registered that a slower increase in new work has applied a brake on production growth at their plants, noted Markit. New business grew just modestly in November, with the rate of growth the weakest since July.

Several firms commented on strong spending patterns among clients, although there were also reports citing weaker demand from abroad. Reflecting this, the latest data showed that new export orders rose at the least marked pace for three months. A modest rate of job creation was maintained throughout the manufacturing sector in November, which survey respondents attributed to sustained sales growth and the launch of new products.

Manufacturers also sought to stimulate their stocks of finished goods, with the pace of inventory building the second-fastest since January 2015. But stocks of inputs were streamlined again in November, said Markit.

Input purchasing fell a bit in November, ending the three-year period of expansion. Several companies have cited increasing uncertainty regarding the demand outlook. In the meantime, average cost burdens rose sharply. But the overall rate of cost inflation eased from October’s seven-month high, which added to a slightly weaker rise in factory gate prices.