Mexico | Manufacturing lost dynamism in 1Q23, although very gradually

Summary

The BBVA Multidimensional Manufacturing Indicator grew 3.1% in March (YoY), taking the average year-on-year variation for 1Q23 to 3.9%, 0.8 pp below the 4Q22 mean

Key points

• Key points:
• While the 1Q23 figure signals a gradual slowdown in manufacturing at the start of the year, it also shows greater resilience than anticipated, driven (among other factors) by the deepening of global value chains.
• Although the automotive sector has lost dynamism in recent months, it still maintains a level of production equivalent to its pre-COVID figure, and other segments (such as manufacturing of electrical appliances, machinery and equipment) are still above that same threshold.
• In terms of capacity utilization, sectors such as computer equipment, electrical appliances, machinery and equipment show levels 10% above their pre-pandemic level (Jan-2020), possibly benefiting from nearshoring.
• Other segments are losing ground, such as garment manufacturing (17% below its pre-COVID level in terms of capacity utilization), and the chemical industry (11% below its pre-pandemic figure).

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