Mexico’s manufacturing sector contraction deepened in December amid limited demand, job cuts and decline in output, survey data from IHS Markit showed on Monday.
The purchasing manager’s index for the manufacturing sector dropped to a three-month low of 42.4 from 43.7 in November. A reading below 50 signals decline in activity in the sector.
“With domestic issues exacerbated by the pandemic, monthly rates of reduction in December for output, new orders and employment were all among the sharpest seen since data collection started in April 2011,” Pollyanna De Lima, economics associate director at IHS Markit, said.
Meanwhile, firms turned optimistic regarding the growth outlook on expectations that the Covid-19 pandemic could subside as several countries across the world have started vaccination against the coronavirus.
IHS Markit forecast 3.7 percent growth in Mexico’s output this year. The research firm also expects an upward revision should there be favorable negotiations between Mexico and the US once the new US administration takes over, De Lima said.