July 1, 2013 / 2:30 PM / in 4 years

Mexico June manufacturing growth dips to over 2-year low

MEXICO CITY, July 1 (Reuters) - Mexican manufacturing sector growth slowed in June to a 27 month-low on weakness in new orders and output, a survey showed on Monday, suggesting Latin America’s no. 2 economy remains sluggish.

The HSBC Mexico Manufacturing Purchasing Managers’ Index (PMI) fell to 51.3 in June after adjusting for seasonal variation, down from 51.7 in May to the weakest pace of expansion since data collection began in April 2011.

The reading above 50, however, showed continued growth.

“This confirms that the loss of steam in the manufacturing sector will prevail in the second quarter,” HSBC economist Sergio Martin said in a statement.

However, Martin added that he expected gross domestic product (GDP) growth to pick up in the second half of the year.

Factory output rose only slightly in June, at its slowest pace since data collection began.

The rate of growth in new orders also eased to a new 27-month low, while new export orders contracted for the second month running to notch a survey low.

Manufacturing exports equate to about 25 percent of Mexico’s GDP and the country had 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 3.1 percent from 3.9 percent last year.

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

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