MEXICO CITY: Mexico's manufacturing sector sentiment fell in March to a five-month low as a jump in costs mostly due to a weak peso combined with a slower pace of new orders and output.
The HSBC Mexico Manufacturing Purchasing Managers' Index cooled to 53.8 in March when adjusted for seasonal swings, its lowest since October 2014, from 54.4 in February, a survey showed on Wednesday.
A reading above 50 signals expansion, while a lower reading points to contraction.
Factory output slipped for the second month in a row, although it still pointed to higher production volumes. Input prices rose at their fastest pace since June 2012.
A slump in oil prices and expectations of higher interest rates in the United States have hammered Mexico's peso since last year, and the currency hit a fresh 6-year low last month.
"The latest survey still points to a solid overall performance. Most encouragingly, job creation picked up in March in spite of softer new business gains and pressure on margins from rising input costs," Markit economist Tim Moore said in a statement.
Mexico exports mostly manufactured goods and sends nearly 80 percent of its exports to the United States. Stronger U.S. demand is expected to help the Mexican economy grow around 3 percent this year, up from 2.1 percent last year.
The PMI index, compiled by Markit, is composed of five sub-indexes tracking changes in new orders, output, employment, suppliers' delivery times and stocks of raw materials and finished goods.
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