The HSBC Mexico Manufacturing Purchasing Managers' Index rose in August to 50.8. The Index is a compilation of five factors that give an idea of how the manufacturing industry is performing: new orders, output, employment, suppliers' delivery time and stocks of materials and finished goods. Readings above 50 indicate expansion. Though Mexico's economy had something of a slow start this year, according to The Financial Times, the most recent PMI reading indicates, along with other factors, that it is likely to catch up in the year's latter half. Factory output and new orders also increased in August.
Manufacturing in Mexico is cost-effective and sensible for many corporations, particularly those that do business in the North American market. The growth in the industry may indicate more companies are coming to this realization that offshoring is a viable and beneficial business practice. In Latin America's second-strongest economy, according to Reuters, manufacturing is essential. It makes up a fourth of the country's GDP and employs many people. American companies looking to reduce manufacturing costs might consider contributing further to Mexico's manufacturing recovery by establishing a presence in the country.