MEXICO CITY, (Reuters) - Growth in Mexico’s manufacturing sector rose to a more than one year-high in June, on stronger output, new orders and employment, a survey showed on Monday.
The Markit Mexico Manufacturing Purchasing Managers’ Index MXPMIM=ECI rose to 52.3 in June from 51.2 in May when adjusted for seasonal swings, hitting its highest since May 2016.
A reading above 50 signals expansion in the sector, while a reading below that points to contraction.
“The latest PMI survey provides a positive signal for near-term growth momentum across the Mexican manufacturing sector,” senior IHS Markit economist Tim Moore said in a statement.
Moore noted the rebound followed a sluggish period early this year where the PMI headline rate was close to its lowest reading in three years.
Higher sales volumes pushed the rate of employment growth to a 14-month high, while input price inflation was down from a peak early this year after the peso sank to a record low.
But the peso has bounced back and business confidence has improved as U.S. President Donald Trump backed away from threats to impose tariffs on Mexican-made goods and moved toward a renegotiation of the North American Free Trade Agreement.
Mexico sends about 80 percent of its exports, which are mostly manufactured goods like cars and TVs, to the United States.
The PMI index is composed of five sub-indexes tracking changes in new orders, output, employment, suppliers’ delivery times and stocks of raw materials.
Reporting by Michael O'Boyle, Editing by Chizu Nomiyama