FX.co ★ Mexico Factory Activity Declines for 12th Month

Mexico's S&P Global Manufacturing PMI declined to 46.3 in June 2025 from 46.7 in May, marking twelve months of contraction and the most unfavorable quarterly average since early 2021. The decline is attributed to a significant drop in new orders, with businesses citing sluggish demand, project postponements, and the consequences of U.S. tariffs, particularly on exports. Although production decreased, it did so at a slightly reduced pace, while procurement was curtailed to align with the need for inventory adjustments and persistent high costs. Employment dropped for the 14th consecutive month, experiencing the steepest decline since early 2022. Input prices continued to climb, driven by supplier pressures and currency exchange rates, with only a limited number of businesses able to transfer these costs to customers. While there has been a slight uptick in business confidence, growth forecasts remain among the weakest historically recorded.