April 1, 2013 / 3:31 PM / 5 years ago

Mexico March factory activity slows to weakest since January 2012

MEXICO CITY, April 1 (Reuters) - Mexican factory activity growth slowed for the third month in a row in March to its weakest pace of expansion since the start of last year, a survey showed on Monday.

The HSBC Mexico Manufacturing Purchasing Managers’ Index (PMI) dipped to 52.2 in March, its lowest reading in 14 months, down from 53.4 in February, after adjusting for seasonal variation.

Although the reading above 50 showed continued expansion, output growth hit its lowest since April 2011, the start of the data series, while price inflation for factory parts eased sharply from an eight-month peak in February.

Manufacturing exports are equivalent to about 25 percent of Mexico’s gross domestic product (GDP) and the country has been shielded from a weak global economy by continued U.S. demand for goods such as cars and televisions.

Mexico’s growth is seen slowing this year to around 3.5 percent from 3.9 percent in 2012 due to weaker U.S. demand.

HSBC economist Sergio Martin said he expected growth of only 3.2 percent in 2013, noting the data “suggests that the loss of momentum in the manufacturing sector will prevail in the first quarter of 2013.”

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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