September 1, 2017 / 2:37 PM / 19 days ago

Mexico factory activity bounces back in August

An employee works on a printed circuit board at the assembly line of a factory that exports to the U.S., in Ciudad Juarez, Mexico, July 13, 2017. Picture taken July 13, 2017. REUTERS/Jose Luis Gonzalez

The pace of growth in Mexico’s manufacturing sector picked up in August on stronger output, new orders and employment, a survey showed on Friday.

The Markit Mexico Manufacturing Purchasing Managers’ Index MXPMIM=ECI rose to 52.2 in August from 51.2 in July, when adjusted for seasonal swings.

A reading above 50 signals expansion in the sector, while a reading below that points to contraction.

“The latest data sustained the recent trend of growth, but at a modest pace,” IHS Markit director Paul Smith said in a statement.

Output and new orders picked up after they had slipped in July. August’s index level was still below June’s high.

Mexico sends about 80 percent of its exports, which are mostly manufactured goods like cars and TVs, to the United States.

Trade negotiators from Mexico, Canada and the United States will meet this weekend in Mexico in a second round of talks to rework the North American Free Trade Agreement (NAFTA).

U.S. President Donald Trump has been threatening to tear up the deal if he does not get his way.

The PMI index is composed of five sub-indexes tracking changes in new orders, output, employment, suppliers’ delivery times and stocks of raw materials.

Reporting by Michael O'Boyle, Editing by Chizu Nomiyama

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