Manufacturers in Mexico reduce production, cut jobs as new sales fall: Report

By Ovunc Kutlu

ISTANBUL (AA) - Manufacturers in Mexico are scaling back their production and cutting jobs as new sales are decreasing, according to a report released Friday.

"Driven by a prolonged decline in new business inflows, firms reduced production volumes, laid off workers, and trimmed their input purchases," S&P Global said in its report.

"Cost burdens rose further, with the rate of inflation remaining high despite receding to the weakest since April, prompting another mild uptick in factory gate charges," it added.

The S&P Global Mexico Manufacturing Purchasing Managers’ Index (PMI) came in at 48.4 in October, rising from 47.3 in September, but remaining below the neutral 50.0 level and in contraction territory for the fourth consecutive month.

The report said total new orders declined for the fourth month in a row, with unfavorable demand trends, pending project approvals, cashflow challenges, and intense competition from China.

Pollyanna De Lima, economics associate director at S&P Global Market Intelligence, said there were some silver linings despite the widespread contraction.

"Notably, there was a welcome easing of cost pressures and a stabilisation of selling price inflation," she said. "Another encouraging sign was a rebound in business confidence, largely driven by hopes for improved trade conditions following the US election."

"While Mexican manufacturers began the final quarter of 2024 on shaky ground, as indicated by further declines in total sales, new export orders and production, it is reassuring that the pace of these reductions has at least slowed," she added.