News, Insights and Best Practices for Manufacturing in Mexico

Manufacturing sentiment in Mexico highest in a year

07 Feb 2014

Category: Manufacturing in Mexico

Sentiment among the manufacturing sector in Mexico rose in January to its highest level in a year, according to the HSBC Mexico Manufacturing Purchasing Managers' Index.

The index rose to 54.0 in January, from 52.6 in December, after adjusting for seasonal variations.

Any reading above 50 indicates an expanding market, while a number lower than 50 suggests the market is contracting.

Expansion hasn't been this strong since January of the previous year, according to the source. Production has been on the rise since November due to bolstered U.S. demand.

"We believe that this upward trajectory will prevail in the coming months supported by a relative improvement in external demand," said Sergio Martin, chief economist at HSBC in Mexico.

According to the source, the U.S. buys nearly four-fifths of Mexican exports, which are mainly goods built in factories, such as cars and televisions.

Mexico's economy slowed to a growth of around 1.3 percent last year, but has since begun picking up. While some analysts predicted growth in the new year of 3.4 percent, the actual growth stands at around 4.1 percent.

Mexico is a great resource
Many companies are taking advantage of nearshoring – moving some of their operations to Mexico – in order to capitalize on the great opportunities of that country for manufacturing. One recent example is General Electric, which inaugurated a new Regional Financial Center in Mexico so as to enhance efficiency, according to Nearshore Americas. GE predicts that this center will lower costs by 20 percent throughout its factories in Latin America through organizational effectiveness.

Dealing with the complexity of moving your manufacturing business across the border can be daunting. A business might consider hiring an offshore shelter company to handle its logistics. This will enable a quick and cost-effective outsourcing job.


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