Overview and Relevance of the Mexican Economy Indicators
The Industrial Production Index (IMEF) for Mexico has shown a fragile economic situation at the beginning of the third quarter of 2025. The Manufacturing IMEF Indicator for July fell to 45.5 points from June’s 47.6, marking a more rapid decrease than in the previous month.
Based on July’s results, both the Manufacturing IMEF Indicator and the Non-Manufacturing IMEF Indicator suggest that Mexico’s economy remains fragile, with low activity and no clear signs of strength as the third quarter begins. The Manufacturing IMEF Indicator dropped 2.1 points to 45.5, deepening its 16-month contractive trajectory. Meanwhile, the Non-Manufacturing IMEF Indicator improved slightly by 0.4 points to 49.1, though it remains below the expansion threshold.
Understanding the IMEF Indicators
The IMEF indicators range from 0 to 100 points, with a 50-point threshold separating economic expansion (above 50) from contraction (below 50). Both sectors reported levels below 50 in July, indicating a weak economic environment.
Key Components and Their Decline
Crucial components such as new orders (43.3), production (44.2), and employment (43.4) all experienced significant drops, highlighting the loss of operational momentum.
The IMEF highlighted a dramatic collapse in inventories, falling from 53.0 to 46.1 points in a single month—a sharp contraction of 6.9 units. Additionally, the 2.3-point drop in production and the 1.7-point decline in new orders further emphasize the persistent weakness in the manufacturing sector.
Even the size-adjusted sub-index showed a marginal improvement of 0.2 points but remained in contractive territory, reflecting a generalized slowdown across all sectors.
Non-Manufacturing Sector’s Minor Recovery
The Non-Manufacturing IMEF Indicator showed a minor recovery, increasing by 0.4 points to reach 49.1—though it still falls short of the expansion threshold.
The trend-cycle measurement remained unchanged at 49.2, suggesting that the sector’s activity remains stagnant in a contractive phase.
Size-adjusted measurements showed a marginal improvement of 0.1 points, reaching 47.3—also in contractive territory.
These three indicators have been on a downward trend for eight consecutive months (general and size-adjusted indices), reinforcing the signal of weakness in the services and commerce sector.
Economic Growth in the Second Quarter of 2025
Mexico’s economic growth surprised to the upside in the second quarter of 2025, advancing by 0.7% on a quarterly basis and surpassing market consensus.
On an annual basis, the GDP grew by 1.2%, accumulating a 0.9% expansion in the first half of the year. “This performance is notable given the high level of trade uncertainty, climate tensions, and less dynamic consumer spending,” stated the IMEF in its monthly report.
Sources of Resilience
Resilience came from multiple fronts. The manufacturing sector rebounded after two consecutive quarters of contraction, driven by non-residential construction linked to public and railway works. Services also grew, supported by retail trade and transportation, suggesting that despite mixed signals on employment and remittances, domestic consumption remains a key driver.
However, the agricultural sector declined due to droughts and a high base of comparison.
External Factors
June’s trade balance reported a surplus, driven by a rebound in non-oil exports with notable performance in manufacturing, especially the automotive segment.
Nevertheless, weakness in capital goods imports suggests caution in private investment. Moreover, relevant risks persist: the threat of new tariffs from the US, recent regulatory requirements in Mexico, and uncertainty surrounding the 2026 review of the T-MEC.
Key Questions and Answers
- What are the Mexican economy indicators mentioned in this article? The Industrial Production Index (IMEF) for both manufacturing and non-manufacturing sectors is discussed, highlighting their performance in the second quarter of 2025.
- How have these indicators performed recently? Both the manufacturing and non-manufacturing IMEF Indicators show a fragile economic situation, with the manufacturing sector contracting and the non-manufacturing sector barely above the expansion threshold.
- What factors contributed to Mexico’s positive economic growth in Q2 2025? The resilience came from the manufacturing sector’s rebound, driven by non-residential construction, and the growth in services supported by retail trade and transportation.
- What external factors may impact Mexico’s economy? Persistent risks include potential new tariffs from the US, recent regulatory requirements in Mexico, and uncertainty surrounding the 2026 T-MEC review.
