Mexico | Manufacturing resilience in September; lower growth ahead

Summary

The BBVA Multidimensional Manufacturing Indicator (BBVA MMI) grew 8.1% in September (YoY), 1.2 pp above the figure last month.

Key points

• Key points:
• The September moderate growth points to the resilience of domestic manufacturing in the face of a better-than-expected performance in the US industrial sector in the same month (vis a vis other supply components that already show deterioration).
• However, indicators of new manufacturing orders in Mexico and the US point to a slowdown in the coming months, in an environment of weakening demand due to high prices and a more restrictive monetary policy.
• In terms of capacity utilization, the automotive segment exceeds its pre-COVID level for the first time since March, reflecting the fading of bottlenecks.
• Nonetheless, other subsectors continue to face production difficulties; the capacity utilization in the processed food industry is still 2.5% below its pre-pandemic level, with zero growth in August, while the chemical industry remains 2.9% below.

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