Why Mexico’s Manufacturing PMI Fell in February 2018

According to a report provided by Markit Economics, Mexico’s (EWW) manufacturing activity fell in February as compared to January 2018. Its manufacturing PMI (purchasing managers’ index) stood at 51.6 in February as compared to 52.6 in January 2018. The PMI figure didn’t meet the market expectation of 52.5.

Mexico’s manufacturing PMI in February 2018 was affected by the following factors:

• Production output and volume rose at a softer rate in February as compared to January 2018.
• Both the new orders and export orders rose at a weaker rate in February 2018.
• Employment in the manufacturing sector rose marginally during the month.

The weaker overseas demand was the primary factor that hampered the performance of Mexico’s manufacturing PMI in February 2018. The recent announcement of the US President Donald Trump’s proposed implementation of an import tariff on steel and aluminum could affect Mexico’s business, as Mexico is one of the top five exporters of steel to the US. It might also affect Mexico’s productivity in the near future.

The iShares MSCI Mexico Capped ETF (EWW), which tracks the Mexican economy, fell 6% in February 2018. The Global X FTSE Southeast Asia ETF (ASEA), which tracks the performance of Southeast Asia, rose marginally in the same month.

In the next part of this series, we’ll analyze the performance of Russia’s manufacturing PMI in February 2018.