Mexico | Manufacturing slows in October; impact of hurricanes and strikes in the US

Summary

The BBVA Research Multidimensional Manufacturing Indicator fell (-)4.1% YoY in October, after the improvement recorded in the previous month; the year-on-year variation averages (-)2.8% for the first ten months of the year, 2.8 pp below the figure observed in the same period of the previous year.

Key points

• Key points:
• The most recent data on industrial activity in the US show a slowdown in manufacturing production due to the extended effect of hurricanes Helene and Milton, in addition to the strike by factory workers at the aeronautical company Boeing.
• According to the industrial activity figures from INEGI, in accumulated terms manufacturing grew 0.2% in September, compared to the same period of the previous year, with eight of the twenty-one subsectors reporting production levels below those recorded in January.
• In terms of capacity utilization levels, as of September, ten of the twenty-one subsectors were still below their pre-COVID levels (vs. ten the previous month); the best performance is shown by the manufacture of petroleum products.
• We anticipate a gradual recovery in manufacturing output going forward, as the negative impact of the hurricanes and the strike in the US aeronautical sector fades; and the prolonged resilience of US consumption, with a rebound in spending on durable goods, in a context of gradual decreases in the interest rate.

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