Manufacturing IMEF indicator increased 5 points to reach 48.1
The IMEF Manufacturing Indicator increased in July by 5.0 points to 48.1 units, remaining in the contraction zone (<50) for the fourteenth consecutive month.
During July, four components of the Manufacturing Indicator registered increases and, again, two of them significantly.
The New Orders sub-index increased 10.8 points, to stand at 48.1, and the Production sub-index increased 8.3 points, to close at 47.2.
For its part, the Employment sub-index also showed a significant increase of 5.2 points, to close at 47.0, and Inventories increased 3.6 points, to close at 50.8 and, thus, move to the expansion zone.
In contrast, the Product Delivery subindex fell 0.8 units to 49.0.
IMEF indicator
The IMEF Indicator is a diffusion index that evaluates the economic environment based on a survey of five qualitative questions.
In particular, the IMEF Indicator is built to help anticipate the direction of manufacturing and non-manufacturing activity in Mexico and, from the expected evolution of these sectors, infer the possible evolution of the economy in general in the short term.
The IMEF Indicator varies in an interval 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 faster 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.
Services
The IMEF Non-Manufacturing Indicator registered an increase of 4.0 points in July to close at 47.0 units and be in a contraction zone for the sixth consecutive month.
During July, again, the New Orders and Production sub-index registered important increases.
The first increased 7.6 units, to ascend to 46.3, and the second increased 6.9 units, to close at 45.3.
For its part, the Employment sub-index increased 0.4 points, to stand at 42.8 units.
Finally, the Product Delivery subindex increased 1.1 units to close at 52.6.
«Figures from the IMEF Manufacturing and Non-Manufacturing indicator at the beginning of the second half of this year seem to suggest that the Mexican economy bottomed out sometime in the second quarter of 2020 and that since then the recovery began,» said IMEF.
«However, this correction is seen as fragile and uncertain and, at best, slow and prolonged,» added the institute.
