Why Mexico’s Manufacturing PMI Rose Sharply in August 2017
Mexico’s manufacturing PMI in August
In August 2017, Mexico’s (EWW) manufacturing activity saw a strong improvement in overall business conditions. Mexico’s manufacturing PMI stood at 52.2 in August 2017 as compared to 51.2 in the previous month, according to the HIS Markit report. The PMI figure was far above the preliminary market expectation of 51.5.
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The stronger Mexico manufacturing PMI in August was mainly due to the following factors:
- Production output and volume improved at a stronger rate in August 2017. The overall operating condition in the manufacturing sector improved in that month.
- New orders and export orders all expanded at a faster pace in that month, which shows that the client demand went up.
- Job creation in the manufacturing sector also improved in that month.
The economy experienced higher domestic and international (ACWI) (VTI) demand in August 2017. After Donald Trump’s win in the US presidential election, the Mexican economy showed some nervousness, as the trade uncertainty rose among the US (QQQ) (SPY) and Mexico. However, recently, Fitch Ratings upgraded its outlook from “negative” to “stable” for Mexico as its trade uncertainty with the US (IWM) minimized.
The iShares MSCI Mexico Capped ETF (EWW), which tracks the performance of Mexico, rose nearly 0.3% in August 2017. Over the past year, the ETF returned nearly 20%.
In the next part of this series, we’ll analyze the performance of Indonesia’s manufacturing PMI in August 2017.