Mexico’s manufacturing sector contracted for the first time since data collection began in April 2011, according to the HSBC Purchasing Managers’ Index.
The headline figure was 49.7 in July, down from 51.3 in June, with new export orders falling for the third month in a row. This is the first time it has fallen below the 50 mark. A reading above 50 suggests expansion in the sector, while below 50 suggests decline, with the latest figures indicating that business conditions are deteriorating for Mexico’s manufacturers.
The recent increase in non-oil exports represents a glimmer of hope for the sector
Sergio Martin, Chief Economist, HSBC Mexico, said: “Since the series began, this is the first time in which the index lies below the 50-point break-even level. This suggests that manufacturing will keep on struggling to grow in 3Q 2013. However, the recent increase in non-oil exports represents a glimmer of hope for the sector.”
Manufacturing employment showed little change from June, with the majority of firms keeping their staff numbers unchanged. Firms reported greater input costs in July, with a number of companies citing higher raw material prices and unfavourable exchange rates. Manufacturers lowered selling prices for the fourth consecutive month in a bid to win new business.
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