Mexico factories returned to modest growth in August-PMI
MEXICO CITY, Sept 2 (Reuters) - Mexico's manufacturing sector grew slightly in August, rebounding from its first contraction in more than two years, driven by rising output and new orders, a survey showed on Monday.
The HSBC Mexico Manufacturing Purchasing Managers' Index (PMI) rose to 50.8 in August after adjusting for seasonal variation, from 49.7 in July.
A reading above 50 signals expansion, but the monthly reading was still the second-lowest since the series began in April 2011.
"We maintain our view that the economy will gain momentum 1/8in the second half of 2013 3/8, although at a slower pace than expected previously," said Sergio Martin, Chief Economist at HSBC Mexico.
Factory output and new orders also increased in August but at a sluggish pace, while new export orders continued to contract in Latin America's No. 2 economy.
Factory exports make up about a quarter of Mexico's GDP and shakier U.S. demand and weaker government spending is seen pushing down Mexico's growth this year.
Mexico's economy contracted for the first time in four years in the second quarter, prompting the government to slash its growth outlook for 2013. However, the finance ministry expects growth to pick up in the second half.
The PMI index, compiled by Markit, is composed of five sub-indices tracking changes in new orders, output, employment, suppliers' delivery times and stocks of raw materials and finished goods.