The S&P Global Manufacturing Purchasing Managers’ Index (PMI) fell to 54.0 in July from 54.1 in June. As a result, the index remained well above the 50.0 threshold unchanged, indicating a continued, albeit moderate, improvement in trading conditions compared to the previous month.
The July reading was mainly the result of both new orders and production expanding at the weakest pace in the past three months, amid still favorable demand. Raw material shortages drove production moderation, while overall sales were held back by weakening external demand as international orders contracted for the fifth consecutive month. More positively, employment increased at the fastest pace in about a year in July. As for prices, input costs increased again in July, driven by the weakening of the currency, high interest rates, logistical bottlenecks and the war in Ukraine. Producer prices also increased in July. Finally, corporate sentiment was upbeat in July and strengthened to a three-month high.
Analysts interviewed by FocusEconomics for this month’s LatinFocus Consensus Forecast see industrial production expanding by 0.5% in 2022, which is up 0.1 percentage points from last month’s estimate. In 2023, industrial production is expected to grow by 1.3%.