Mexico’s manufacturing sector shrank at its fastest pace in 10 months in January, as rising coronavirus infections, ongoing supply bottlenecks, and high levels of inflation battered industrial activity, a survey showed on Tuesday.
The IHS Markit Mexico Manufacturing Purchasing Managers’Index tumbled to 46.1 in January from 49.4 in December, making it well below the 50 threshold that separates growth from contraction.
The weakest reading in the index since last March is a setback for Mexico after a marked slowdown in the economy at the end of 2021 left it battling recession.
The index has remained below 50 every month since March 2020 and reached a trough of 35.0 in April 2020 during the initial lockdown phase of the coronavirus pandemic.
“The new wave of COVID-19 contamination exacerbated the already tough challenges facing Mexican manufacturers. Companies have struggled to see a monthly increase in new orders for a while, and the contraction gained speed in January,” said Pollyanna De Lima, Economics Associate Director at IHS Markit.
Sales and production contracted, and labor shortages intensified as staff absences increased due to rising levels of infection among workers, the survey said.
Input costs rose at the second-fastest pace in close to five years, it added.
Source: El Economista