Manufacturing in Mexico recovers from earthquake-related downturn
Staff Writer |
After having contracted during October in the aftermath of a natural disaster, Mexico’s manufacturing sector rebounded in November.
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Businesses benefited from strong inflows of new work from both domestic and external markets, raising output accordingly.
Jobs were created, while additional quantities of inputs were purchased.
Goods producers engaged in stock-building initiatives, while price indices highlighted upward inflationary pressures.
Looking ahead, firms remained optimistic towards the 12-month outlook for production.
The headline seasonally adjusted IHS Markit Mexico Manufacturing PMI climbed from 49.2 in October to 52.4 midway through the final quarter, indicating an overall improvement in the health of the sector.
The largest positive contribution to the PMI figure came from the new orders sub-component.
November saw a sharp expansion in new work, one that was the strongest in one-and-a-half years.
Panel members linked this robust rise to strengthening demand conditions and greater client bases.
New export sales also expanded in November, but to a lesser extent than seen for total new orders.
The upbeat demand environment encouraged goods producers to scale up output.
Although moderate overall, the latest increase represented a substantial turnaround from October’s contraction.
To cope with greater workloads, manufacturers purchased additional quantities of raw materials and semi-finished products.
Furthermore, the rate of expansion in buying levels was solid.
Operating capacity was expanded in November as manufacturers hired extra staff (on average).
The rate of job creation was modest, albeit in line with its long-run trend level.
Since August 2014, the only decline in headcounts was recorded in October this year.
One factor leading Mexican manufacturers to increase employment was a rise in outstanding business.
Following a decline in the prior survey period, backlogs expanded slightly in November.
Inventories showed similar patterns in November, with both pre- and post-production stocks increasing.
The quicker rate of accumulation was noted for the latter. ■
A strong storm that originated over the Pacific has tracked through the Great Basin and is currently transitioning across the Rockies to redevelop across the central High Plains later today into early Saturday morning.