Mexico's manufacturing sector contracted again in November, but at a slower pace than the previous month, according to the Mexican finance executive association's (IMEF) latest purchasing managers index (PMI) surveys.
The manufacturing PMI rose to 48.3 from 47.2 in October, inching closer to the 50-point threshold that signals expansion. Still, the index remained in contraction territory for an eighth consecutive month.
"There is some stabilization in the loss of economic momentum recorded in previous months," IMEF noted, but the overall trend reflects "stagnation or the absence of solid expansion in both manufacturing and non-manufacturing sectors." Manufacturing accounts for about a fifth of Mexico's economy.
Within the manufacturing PMI, the new order index increased by 1.3 points to 47.3 but stayed in contraction. Production fell by 0.5 points to 46.1, with both sub-indicators in contraction for an eighth month.
In contrast, non-manufacturing industries—including services and commerce—moved into expansion territory, rising to 50.5 in November from 49.3 in October. New orders in this sector climbed 2.1 points to 51.5, production rose 1.8 points to 50.5 and employment rose by 1.2 points to 49.1, though it remained in contraction for a fifth consecutive month.
Inflation concerns raised
Looking ahead, IMEF highlighted potential inflationary pressures tied to US President-elect Donald Trump's policies.
These include possible supply chain disruptions driven by escalating conflicts with Russia and in the Middle East as Trump shifts toward a more transactional approach with traditional allies.
IMEF also warned that Trump may seek to influence the US Federal Reserve to accelerate rate cuts, further fueling inflation. Domestically, deregulation and tighter migration constraints may fail to ease trade bottlenecks. Meanwhile, tax cuts without corresponding spending reductions could add significant upward pressure on prices, IMEF said.
