Manufacturing activity in Mexico contracted for a 14th consecutive month in May, though at a slower pace, according to a purchasing managers' survey.
The manufacturing purchasing managers' index (PMI) rose to 47.4 in May from 45.5 in April, marking the 14th consecutive month below the 50-point threshold between contraction and expansion, the finance executives' association IMEF said.
The subindex for new orders increased by 2.7 percentage points to 44.4, recovering from a post-pandemic low in April. The production subindex rose by 3.1 points to 46.6, while employment held almost steady at 44.6. New orders and production have now been in contraction for 15 consecutive months, and employment for 16.
The inventories subindex rebounded by 5 points to 51.2 in May, returning to expansion after one month in contraction.
The upticks in May likely reflect firms restarting production to process backlogged orders previously paused because of US tariff uncertainty and re-build inventories as new orders also began to arrive last month, IMEF's head of economic studies Victor Herrera told Argus.
"The initial implementation of tariffs led many to put the brakes on production, but this was ultimately short-lived, as reorders started to come through," Herrera said.
The non-manufacturing PMI — covering services, commerce and trade — also rose slightly to 49.4 in May from 49.1 in April, marking a sixth month in contraction, under 50.
Within that index, new orders increased by 0.7 points to 48.8, production by 1.7 points to 49.5 and employment fell by 0.4 points to 48.5.
IMEF, which compiles the PMIs with statistics agency Inegi, said both indexes remain in contraction and May data "confirm the fragility of the Mexican economy at the beginning of the second quarter, in line with a weak growth trajectory and lack of sustained momentum."
