Mexico Factory Activity Weakens

The S&P Global Mexico Manufacturing PMI fell to 49.8 in August 2026 from 51.3 in the prior month, signaling a renewed deterioration in operating conditions. A reduction in factory output weighed most, marking the steepest contraction in eight months as firms reported subdued market conditions, material shortages and shipping delays linked to the conflict in the Middle East. Demand also weakened, as new order growth slowed from recent peaks, reflecting a fall in new export orders at the quickest pace in 2026 so far. As a response, manufacturers trimmed their purchasing activity, marking the first reduction in three months. Stocks of purchases also fell, while fineshed goods inventories rose slitghly. In turn, cost pressures continued to moderate, as the input cost inflation slipped to a five-month low, although still elevated amid US tariff and Middle East uncertainty. Looking ahead, sentiment turned pessimistic, with firms citing concerns over general market uncertainty.

The S&P Global Mexico Manufacturing PMI held at 51.3 in July 2026, signalling a second consecutive monthly improvement in operating conditions. New orders rose at the fastest pace since November 2023, driven by stronger domestic demand, while export orders slipped back into contraction. Factory output remained in decline, extending a downturn that began two years ago, amid weakness in the automotive and construction sectors and plant maintenance. Finished goods inventories fell, while pre-production stocks declined due to supplier delivery delays. Vendor performance deteriorated further amid shipping bottlenecks, supplier shortages and the Middle East conflict, prompting firms to raise input purchases at the fastest pace in nearly two-and-a-half years. Input cost inflation remained elevated, driven by higher fuel, material and transport costs and tariffs. Business confidence stayed subdued amid concerns over cash flow, insecurity, international competition and geopolitical risks.

The S&P Global Mexico Manufacturing PMI rose to 51.3 in June 2026 from 49.6 in May, marking the strongest reading since March 2024 and signaling improvement in operating conditions. Order book volumes expanded at the fastest pace in 27 months, supported by the FIFA World Cup, while new export orders rose at the end of the second quarter. Production declined marginally due to cash flow issues, input shortages, and technical stoppages. Input inventories fell for a ninth consecutive month as supplier delivery delays persisted, driven by blockades, highway insecurity, material shortages, customs issues, and the conflict in the Middle East. Meanwhile, buying activity rebounded, reflecting stronger demand and inventory building. On the labor market, manufactures singaled another job shedding. Meanwhile, cost pressures eased.Looking ahead, manufacturers remained optimistic, with business confidence rising to a three-month high.