MEXICO CITY (Reuters) - Mexico’s manufacturing sector contracted for the second month running in December, dragged down by declining business sentiment, a survey showed on Wednesday.
The IHS Markit Mexico Manufacturing Purchasing Managers’ Index MXPMIM=ECI registered a reading of 49.7 in December, the same level as a month earlier.
A reading above 50 signals expansion in the sector, while a reading below points to contraction.
Mexico’s new president Andres Manuel Lopez Obrador took office on Dec. 1. Mexican financial markets have been rattled amid concerns about how the leftist leader could shift economic policy in Latin America’s No. 2 economy.
The December and November figures were the lowest readings since October 2017, and the first time there were two consecutive months of contraction in the current series, which dates to April 2011.
“The Mexican manufacturing sector showed little signs of shaking off its fragility in December, posting back-to-back modest contractions in production,” said IHS Markit economist Pollyanna De Lima.
“Data suggested that the domestic and international markets were sources of weakness, reflecting the wider sluggish performance of the Mexican economy and relatively low sales to the US.”
Mexico sends about 80 percent of its exports, which are mostly manufactured goods like cars and televisions, 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 Anthony Esposito, Editing by Chizu Nomiyama