FX.co ★ Mexico Factory Activity Remains Weak in January

The S&P Global Mexico Manufacturing PMI experienced a slight increase to 46.3 in January 2026, up from 46.1 in December. Despite this, the index still indicates a significant worsening of operating conditions. The results reveal a third straight monthly decrease in demand for Mexican products. New orders plummeted at a notably sharp rate, marking the quickest decline since mid-2025, and production also saw a substantial downturn, though slightly less severe than witnessed at the close of the previous year. There was a drop in new export orders as well, attributed to diminished demand from the US, albeit the contraction rate was less severe than in December. Tariffs were identified as a major contributor to increased input costs, with inflation continuing to accelerate, remaining considerably above its historical average. Companies persisted in transferring these costs to customers, although the rate of output price inflation decelerated to a ten-month low. Meanwhile, the reduction in job numbers eased, reaching its least severe point in three months, yet still remained notable. Business confidence, however, weakened as firms expressed pessimism regarding the year-ahead outlook, marking only the second instance of such sentiment in over five years.