S&P Global Mexico Manufacturing PMI®: October sees revival in demand for Mexican goods

Mexican manufacturers faced a considerably better operating environment at the start of the fourth quarter. Output and new orders returned to growth territory, spurring job creation. While new export business continued its descent, total sales expanded at the strongest rate in over four-and-a-half years.

Price measures signalled mixed trends for October, as input cost inflation gathered pace and output charges were lowered. The S&P Global Mexico Manufacturing Purchasing Managers’ Index™ (PMI®) rose from 49.8 in September to 52.1 in October, signalling a renewed improvement in the health of the sector. The latest figure was the highest since July and above its long-run average.

All of the five sub-components of the PMI (output, new orders, employment, stocks of purchases and suppliers’ delivery times) had a positive directional influence in the PMI. October data signalled a renewed increase in Mexican manufacturing output, underpinned by a marked upturn in inflows of new work, the approval of pending quotations, new product releases and re-stocking initiatives.

That said, the overall rate of production growth was marginal. New orders rose at the quickest pace since February 2019, reflecting renewed strength of the domestic market and the launch of new products. On the other hand, new export business decreased for the second straight month and at the fastest rate since March 2022.

Where a fall in international sales was recorded, companies mentioned weak demand from the US and unfavourable exchange rates. Average input costs across Mexico’s manufacturing industry continued to increase at the start of the final quarter of 2023. The rate of inflation was sharp and stronger than in September, but remained below those seen in 2022.

Panellists reported a wide range of raw materials as being up in price, including food products, chemicals, electronic components, metals and plastics