The Day at a Glance | April 4 2023

*In the United States, the ISM manufacturing index fell to its lowest level in almost three years. 

*IMEF indicators logged different performance among sectors in March. 

*Remittances logged an annual 11.2% increase in February. 

*Inflation for producers receded -0.5% monthly during February, which led to the lowest annual reading since July 2021, setting at 13.2%. 

*Mexico´s manufacturing PMI remained unchanged in March with a 51.0 point reading. 

*The INEGI made its January cyclical indicator known – it increased 0.08 points with respect to December´s figure and set at 101.0 units; while the leading indicator decreased -0.08 points with respect to January, setting below its long-term trend, at 99.9 units. 

*The sale of light duty vehicles in the local market increased to 118,801 in March, logging an annual 24.8% increase. With this, there were 315,126 units sold in the first quarter of 2023, a 24.4% increase. 

*Finland officially became a NATO member today. With this, NATO doubles the military alliance´s border with Russia.  

Economic environment

The ISM manufacturing Index linked its fifth consecutive reading in contractionary territory and fell to its lowest level since May of 2020, at 46.3 points. Moreover, for the first time since 2009, all components set in contractionary territory, with readings below 50 units, after mostly recording setbacks with respect to February. With this, the new orders sub-index receded at a faster pace and logged a 44.3 point figure; while supplier deliveries fell to their lowest level since 2009 – 44.8 points – after having logged a 51.3 point level in February as six industries reported a decrease in employment, causing the sub-index to continue slowing down to 46.9 points. In slightly positive news, the production and client inventory components increased 0.5 and 2.0 points to 47.8 and 48.9 points, respectively; although they remained in contractionary territory. Overall, the manufacturing sector continued weakening in the first quarter of the year amidst fragile demand. But now, this news along with a “cooling down” in employment and a more moderate increase in prices, could indicate that the FED´s restrictive stance is taking effect in a more evident manner. 

IMEF indicators showed divergence in economic activity in March. The manufacturing index decreased -2.0 points with respect to the previous month and set at 49.2 points. This is attributed to decreases among the components that make up the index; the production sub-index was the one that logged the largest setbacks: -6.1 points and set at 47.4 points. With this, four of the five components fell to contractionary territory, with only the employment component remaining above the 50-point threshold, with a 50.7 point figure. For its part, the non-manufacturing index increased 1.1 points in March and set at 54.0 points; it linked 14 months in expansionary territory. All components logged improvement, although production recorded the strongest performance by increasing 1.9 points and setting at 56.2. 

Remittances continued increasing in February. The most recent figure set at 4,348 million dollars, which implies a 11.2% annual increase – above the 20-year average (9.5% annual). This increase was boosted by a larger number of transactions, which increased 10.9%, while the average amount per transaction virtually remained unchanged (0.29%) and amounted to 375 dollars per transaction. However, the peso´s 9.1% appreciation between February of this year against February of 2022 eroded 8.8% of the average amount sent – which is now 6,977 pesos, compared to the previous 7,649 pesos logged a year ago.