Mexico's new orders, output contracts in July fall for 1st time in 10 months

By Ovunc Kutlu

ISTANBUL (AA) - Mexico's new orders and output contracted in July declined for the first time in 10 months, S&P Global said Thursday in a report.

The North American country's Manufacturing Purchasing Managers’ Index (PMI) fell to 49.6 in July, losing 1.5 points from 51.1 in June, according to the report.

A reading above 50 indicates expansion and below 50 shows contraction.

"Hence, the latest reading highlighted a renewed deterioration in operating conditions, albeit one that was marginal," it said. "Firms commented on a range of factors behind the decline in new work intakes, including adverse demand trends, projects awaiting authorisation and intense competition from China.”

While growing competitive pressures curbed output inflation, cost inflation remains elevated, according to S&P Global.

"The sector was again plagued by elevated cost pressures, a key factor that restricted buying levels in July, with firms attributing greater cost burdens to peso depreciation," Pollyanna De Lima, economics associate director at S&P Global Market Intelligence, said in the report.

"In addition to inflation, goods producers faced obstacles such as insecurity on highways, raw material shortages at suppliers, water shortages and insufficient operational machinery," she said. "These factors negatively impacted delivery times, backlogs and inventory levels."