Mexico | Manufacturing regains dynamism in November after the automotive strike in the US

The BBVA Multidimensional Manufacturing Indicator grew by 0.5% YoY in November, bringing the average YoY variation of the first eleven months of the year to 1.5% (vs. 6.6% the previous year)

Key points

• Key points:
• The November data suggests the effects of the automotive strike in the US were temporary, with a recovery in production in the eleventh month of the year, as activities resumed at the affected plants.
• According to INEGI figures, in October the manufacturing subsectors whose production is still well below its pre-pandemic level are clothing manufacturing (10.8% below its pre-COVID figure ), and the wood industry (-7.9%).
• The sectors that stand out for exceeding the level of capacity utilization prior to the pandemic are computing and communications equipment, petroleum products, and electrical appliances (+21.2, +13.0, and +10.2% pp, respectively).
• We anticipate the gradual slowdown in external demand (given the prolonged period of high interest rates) will reduce vigor to manufacturing in the following months; in the medium term, we estimate the outlook of relocation of production (nearshoring) will boost production in the sector.

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