In October 2025, Mexico's S&P Global Manufacturing PMI registered a slight decline, dropping to 49.5 from 49.6 in September. This reading continues the trend of challenging operating conditions, marking the 15th month out of the last 16 where the PMI has lingered below the threshold of 50. Although new orders experienced growth for a third consecutive month, the rate of this growth slowed, and new export orders decreased for the twentieth month in a row. The decrease was primarily driven by weaker demand from Europe and the US, partially balanced by increased interest from Asia and South America.
Factory output shrank for the sixteenth month; however, the rate of contraction showed signs of easing. Companies responded by cutting back on input purchases and reducing their workforce through technical breaks and not renewing temporary contracts. Consequently, job losses reached their highest level since June. While finished goods inventories increased, input stock declined. Costs for inputs rose further due to elevated material and transportation expenses, tariffs imposed by the US, and unfavorable exchange rates, leading to an increase in output prices, albeit at a slower rate than input costs. Although business confidence remains optimistic, there has been a weakening in sentiment.
