The IMEF Manufacturing Indicator increased 1.4 points in January to settle at 50.2 units.
Thus, this Indicator crossed into the expansion zone (> 50) after having remained in the contraction zone for 19 consecutive months.
Its trend-cycle series decreased 0.1 points to close at 49.3 units and continue in the contraction zone for twenty consecutive months.
For its part, the Indicator adjusted by company size decreased 1.1 units to 53.1 units, placing it in the expansion zone for the seventh consecutive month.
During January, four of the five components of the Manufacturing Indicator registered increases.
IMEF Manufacturing Indicator
The New Orders sub-index increased 2.1 points to close at 50.5 units and return to the expansion zone. The Production sub-index increased 1.2 points to 50.2 and also returned to the expansion zone; Employment sub-index increased 0.4 points to close at 49.6 units.
And in particular, the Inventories sub-index stands out, which increased 8.8 points to close at 51.3 units. In contrast, the Product Delivery sub-index decreased 2.1 units to decrease to 47.5 points.
IMEF Manufacturing Indicator and its components
It is expected that as the problem of the epidemic is resolved, mainly due to advances in vaccination programs, there will be a greater recovery in the service sector.
Given its size in the Mexican economy, despite the advances in other components of GDP, such as industrial production, it will be difficult to observe high rates of growth in economic activity until the service sector recovers more quickly.
The IMEF expects this panorama to materialize more clearly in the second half of 2021.
IMEF Non-Manufacturing Indicator and its components
The IMEF Indicator is a diffusion index that assesses the economic environment based on a survey of five qualitative questions.
In particular, the IMEF Indicator is constructed to help anticipate the direction of manufacturing and non-manufacturing activity in Mexico and, based on the expected evolution of these sectors, infer the possible evolution of the economy in general in the short term.
The IMEF Indicator ranges from 0 to 100 points and the level of 50 points represents the threshold between an expansion (greater than 50) and a contraction (less than 50) of economic activity.
In principle, when the index is above the threshold, an increase is interpreted as a sign of a more rapid future expansion; when the index is below the threshold, an increase is interpreted as a sign of a slower future contraction. However, the indicator does not provide specific information on the magnitude of the expected changes.