Mexico factory contraction extends into February

Market: Agriculture, Coking coal, Metals
03/03/25

Mexico's manufacturing sector contracted again in February, according to the latest purchasing managers index (PMI) survey from the finance executive association IMEF.

The manufacturing PMI rose to 47 from 46 in January, marking the 11th consecutive month below the 50-point threshold between contraction and expansion. Manufacturing, which accounts for about a fifth of Mexico's economy, is led by the auto sector, contributing about 18pc of manufacturing GDP.

Within the manufacturing PMI, the new orders index rose 1.6 points to 44.6, still deep in contraction. Similarly, production rose 2.8 points to 45.6. The employment index fell half a point to 46.4 in February, now in contraction for 13 consecutive months.

Both manufacturing and non-manufacturing PMIs increased slightly in February but remained in contraction territory.

The non-manufacturing PMI — covering services and commerce — increased slightly to 49.5 in February from 49.2 in January, staying in contraction for a third consecutive month.

Non-manufacturing new orders rose 1.3 points to 49.4, production increased 1.6 points to 49.1 and employment fell slightly to 48.4 from 48.6, all in contraction.

Victor Herrera, director of economic studies at IMEF, described the upticks on both PMIs as fluctuations, with the statistical "trend line in both PMIs showing we are moving further into contraction."

With US president Donald Trump's tariffs on imports from Mexico set to begin Tuesday, IMEF warned they could severely impact industrial production and financial stability in Mexico.

"This is a sign of further bad news on growth in the short term," with uncertainty tied to looming US tariffs on Mexican goods weighing on investment and industrial activity, Herrera said.

By James Young

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