July 2, 2012 / 2:33 PM / 5 years ago

Mexican manufacturing steps up growth in June-PMI

MEXICO CITY, July 2 (Reuters) - Mexico’s manufacturing sector stepped up its pace of expansion in June as both new orders and output rose, a survey showed on Monday.

The HSBC Mexico Manufacturing Purchasing Managers’ Index (PMI) rose to 55.9 in June from 55.2 in May, after adjusting for seasonal variation. A reading above 50 in the survey, which measures business conditions in the industrial sector, indicates the pace of growth from the previous month.

Total new orders rose for the month, continuing an unbroken trend since the series began in April 2011 and new export orders increased as well.

“The manufacturing sector ... continues to show resilience to external headwinds,” Sergio Martin, chief economist at HSBC in Mexico said in a statement.

Demand from the United States keeps Mexico factories humming and that pull from north of the border helped the country achieve stronger-than-expected economic growth the first quarter.

The HSBC Mexico PMI also showed an increase in input costs - a potentially worrying sign of inflation - with about one in three of those surveyed reporting higher costs in June.

The central bank, which targets 3 percent inflation, has kept rates on hold at 4.5 percent since mid-2009 and is not expected to change rates until early 2014.

The index, compiled by Markit, is composed of five sub-indexes tracking changes in new orders, output, employment, suppliers’ delivery times and stocks of purchases.

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