Is Mexican manufacturing bucking the trend?

The drop in Mexico’s IMEF Manufacturing Index last month stands in stark contrast to the recent strength of industrial surveys elsewhere in the world, notably the US. The good news is that the relationship between the IMEF and actual activity data is pretty weak. What’s more, the recent pick-up in US manufacturing should give a boost to producers in Mexico over the first half of this year too. But any signs that Mexico’s manufacturing sector – which has so far been the lynchpin of the economy’s recovery – is losing steam will concern policymakers. We expect interest rates to remain at record lows well into next year.