Mexico | Manufacturing slows down in 3Q22: weak demand and food industry disturbances

Summary

The BBVA Multidimensional Manufacturing Indicator (BBVA MMI) grew 6.4% in August (YoY), bringing the average year-on-year variation for the first two months of 3Q22 to 5.8%, 0.9 pp below the 6.8% observed in the same period of 2Q22.

Key points

• Key points:
• Capacity utilization in the food industry has continued to slow down since March, affected by disruptions in the production of certain inputs as a result of the conflict in Ukraine; in the automotive industry loses momentum as demand weakens in the face of higher prices and high interest rates.
• Regarding external demand, the component of new orders of the ISM Manufacturing in the US suggests less dynamism for manufacturing exports for the rest of the year.
• We anticipate the manufacturing sector will continue to show less dynamism in a challenging context for demand, given the high levels of inflation and the continuous increases in the reference interest rate.

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