Economics: April manufacturing data may be just a one-off bounce with further weakness to come

MEXICO - Report 20 Jun 2023 by Mauricio González and Francisco González

The industrial activity figures as of April of this year reflect a high increase in manufacturing after registering positive rates but with a deceleration trend in the first months of the year. Manufacturing activity registered an increase of 2.1% with respect to the previous month and 3.2% compared to the same month of 2022, nudging the cumulative increase for January-April period higher, to 2.7% yoy. The sectors that have driven the expansion of manufacturing for January-April 2024 were transportation equipment (which grew a cumulative 10.4%), computers and electronics (7.2%), machinery and equipment (5.4%) and electrical appliances (4.0%).

However, that considerable rise in output in April was accompanied by a seasonally adjusted -0.3% drop YoY in the number of people working at manufacturing enterprises in April, the second consecutive such contraction as March saw such employment slip -0.2%. At the same time, installed capacity utilization at factories was practically unchanged from a year earlier (81.0% as opposed to 80.7%).

In this week’s Outlook, we analyze recent movement in manufacturing indicators and their probable trajectory for the remainder of 2023 and all of 2024.

Now read on...

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