Economy of Mexico closes 2022 with expansion

The mexican economy closed 2022 with an expansion, highlighted the Mexican Institute of Finance Executives (IMEF) when interpreting its indicators on the course of the country.

“The results reflect a slightly better dynamism than that observed in November, which confirms that the economic growth trend prevails in the fourth quarter of the year,” it said in its monthly report.

The IMEF Manufacturer Indicator advanced and consolidated its trend above the threshold of 50, that is, it is expanding. The Non-Manufacturing Indicator maintains solid dynamism, accumulating 11 consecutive months in the expansion zone, thus confirming the good year recorded by the services and trade sector.

The IMEF Indicator varies in an interval from 0 to 100 points and the level of 50 points represents the threshold between an expansion (greater than 50) and a contraction (less than 50), of the economic activity.

The IMEF Manufacturing Indicator for December rose 0.7 points compared to November, standing above the expansion zone (51.8). The IMEF Manufacturing Indicator had been recording levels very close to 50.0, in line with the global trend for the sector; however, the latest data suggest an improvement in the performance of the activity.

“Unlike the information registered in other countries, where a significant contraction of manufacturing is anticipated, in Mexico the leading indicators suggest a certain and moderate expansion,” said the IMEF.

The cycle trend series increased 0.2 points to settle at 51.1 and, with this, accumulate 22 consecutive months in the field of expansion. In relation to the Adjusted Indicator by company size, it decreased -0.2 points, but it adds fifteen consecutive months expanding (51.0 units)

For its part, the IMEF Non-Manufacturing Indicator continues in the expansion zone by closing the year at 53.5 units.

With this data, the Non-Manufacturing Indicator accumulates eleven consecutive months in the expansion zone, reflecting the good dynamism of this sector in the Mexican economy throughout 2022.

The trend-cycle series closed at 53.7 units, while the Adjusted Indicator by company size remained at 55.1 units. Both the trend-cycle indicator and the Adjusted by company size have been expanding for more than a year.

The IMEF Non-Manufacturing Indicator suggests that the service and trade sectors continue to grow and will close the year with solid dynamism.

To take into account: the IMEF Indicator is a diffusion index that evaluates the economic environment based on a survey of five qualitative questions.

In particular, the IMEF Indicator is built to help anticipate the direction of manufacturing and non-manufacturing activity in Mexico and, based on the expected evolution of these sectors, infer the possible evolution of the economy in general in the short term.

In principle, when the index is above the threshold, an increase is interpreted as a sign of a faster future expansion; when the index is below the threshold, an increase is interpreted as a sign of a contraction slower future.

However, the indicator does not provide specific information on the magnitude of the expected changes. The IMEF indicator is presented in seasonally adjusted series, so the complete series is re-estimated each month, which could imply minor changes to the previously published figures.