Mexico's output growth rises, price pressures intensify: Report

ISTANBUL

Mexico's output growth rose higher, but price pressures intensified last month, according to a report by global data provider, S&P Global.

"Ongoing increases in sales support output growth," said the report that was released Monday. "Output charges rise at the fastest rate in 21 months."

Mexico's Manufacturing Purchasing Managers' Index (PMI) fell to 51.1 in June, from 51.2 in May. A reading above 50 indicates expansion and below 50 shows contraction.

"The latest PMI results highlighted a mixture of positive and adverse developments across Mexico's manufacturing industry," it said. "On the plus side, a further increase in factory orders underpinned a quicker uptick in production. On the downside, new export orders continued to fall and more jobs were shed."

S&P Global said new orders placed with manufacturers in Mexico rose for the fifth month in a row in June, while output increased for the second consecutive month, with new business gains and favorable demand conditions.

"Although higher sales continued to support output growth during June, these positive developments were somewhat tempered by undesirable outcomes for exports, employment, inflation and business confidence," Pollyanna De Lima, economics associate director at S&P Global Market Intelligence, said in the report.

"Stubbornly high inflation also presents a difficult scenario for both businesses and consumers," she said. "Other challenges facing goods producers in Mexico included highway insecurity, raw material scarcity, delays at customs, water shortages and wildfires, all of which impacted delivery times, backlogs of work and stock levels."