Mexican factory sentiment rises again in November-PMI

Mon Dec 3, 2012 10:30am EST

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* Mexico factory PMI rises to 55.6, highest since June

* New orders rise at fastest pace in over 1-1/2 years

MEXICO CITY Dec 3 (Reuters) - The pace of growth in Mexico's manufacturing sector rose in November for the second straight month in a sign the economy may hold up better than expected into year-end, a survey showed on Monday.

The HSBC Mexico Manufacturing Purchasing Managers' Index (PMI) rose to 55.6 in November, its highest since June, from an upwardly revised 55.5 in October, after adjusting for seasonal variation.

The rise in sentiment was lifted by the fastest growth in new orders in more than 1-1/2 years. The reading above 50 indicated factory activity continued to expand.

"This suggests that manufacturing activity will maintain healthy growth rates," said Sergio Martin, HSBC's chief economist in Mexico.

Mexico's annual growth rate cooled to 3.3 percent in the third quarter, but solid data near year-end suggest that Mexican growth could come in stronger than expected as U.S. demand for local exports shields Mexico from a wider global slowdown.

Martin said the factory survey, along with signs that the services sector is stronger, pushed HSBC to revise up its outlook for growth to 3.9 percent in 2012 from 3.6 percent.

The survey's component rating output rose to a five-month high, while the sub-index for new orders climbed to the highest since April 2011, when the survey began.

Mexico sends nearly 80 percent of its exports to the United States and its factories operate in near lock-step with their counterparts north of the border.

The HSBC survey also showed input prices, or the cost of parts used in the manufacturing process, rose strongly, picking up their pace from October. Factory managers noted higher prices for raw materials prices such as steel, paper and sugar.

In a sign that the global slowdown is weighing, the pace of job growth slowed to an eight-month low.

The PMI index, compiled by Markit, is composed of five sub-indexes tracking changes in new orders, output, employment, suppliers' delivery times and stocks of raw materials and finished goods.

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