Mexico's IMEF Manufacturing Index Rises To 50 In July  

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Mexico's Institute for Finance Executives, or IMEF, said Monday its manufacturing index rose in July to its highest level in a year in a sign the slump has probably hit bottom.

The IMEF index reached 50 last month, indicating expansion ahead for the first time since June 2008. As with the U.S. Institute for Supply Management indexes, readings of 50 and above point to expansion while readings below 50 point to contraction.

"This result suggests the contraction in manufacturing activity in Mexico ended in the first half of the year," IMEF said in its report, but cautioned that several more readings above the threshold would be needed to confirm the change.

With the sharp drop in U.S. demand for Mexican goods, the country's export-oriented manufacturing sector spearheaded the current recession, which is expected to be even deeper than that of 1995.

IMEF said the new orders and production sub-indexes, at 54 and 51.6, respectively, were both above the level seen in June and in July 2008.

Gross domestic product contracted 8.2% year-on-year in the first quarter of 2009 and the government estimates it shrunk 10.4% in the second. Manufacturing was down 15% year-on-year through May.

IMEF's non-manufacturing index, which measures the performance of services sectors, also indicated expansion in July with a reading of 50.2, its highest level since August 2008.

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