What Does Mexico’s Improving Manufacturing PMI Mean?
Mexico’s manufacturing PMI in September
In September 2017, Mexico’s (EWW) manufacturing activity saw a solid rise in overall business conditions. Its manufacturing PMI (Purchasing Managers’ Index) stood at 52.8 in September compared to 52.2 in August, according to the IHS Markit report. The PMI figure was far above the preliminary market expectation of 51.7.
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The stronger manufacturing PMI for Mexico in September was mainly due to the following factors:
- Production output and volume improved at a faster rate.
- The overall operating condition in the manufacturing sector and factory output improved at a higher rate.
- New orders and export orders rose at a higher rate, which shows that client demand sped up.
- Employment in the manufacturing sector rose significantly.
Manufacturers, wholesalers, suppliers, and retailers were optimistic about the country’s demand outlook. The positive sentiment of various businesses is a major driver for the economy. The Mexican economy faced some trade uncertainty in the months after Donald Trump won the US presidential election. But the risk has minimized gradually. In August 2017, Fitch Ratings upgraded its outlook on Mexico from “negative” to “stable.”
The iShares MSCI Mexico Capped (EWW), which tracks the performance of Mexico, fell 3.2% in September 2017. Over the past year, it has risen 18.0%.
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