Mexico | Manufacturing slows down: expected production volume at minimum since 2020

The BBVA Multidimensional Manufacturing Indicator falls for the second consecutive month, with a variation of (-)1.2% YoY in July; with this data, the average year-on-year variation for the first seven months of the year amounts to 1.3%, 2.9 pp below the average registered in the same period of 2022

Key points

• Key points:
• The fall in July confirms the turning point for manufacturing production in Mexico, given the weakness of the demand for durable goods in the US.
• The INEGI expected production volume indicator (component of the manufacturing orders index) registered its lowest level in July since May 2020.
• In June the sectors of manufacturing activity with the highest participation in production that showed the greatest weakness were the chemical industry and the automotive segment, which registered contractions of (-)3.6% and (-) )2.0% MoM, respectively.
• We expect the slowdown in demand for durable goods in the US to be observed more deeply in the coming months, in a context of tighter financing conditions and a gradual cooling of its labor market.

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