Mexico’s industrial production fell by 0.40% month-over-month in November 2025, according to the latest data from the Sigmanomics database[1]. This decline deepens the recent downtrend, following a -0.30% drop in October and a -1.20% contraction in September. The industrial sector, which accounts for roughly 30% of Mexico’s GDP, continues to face challenges amid global demand softness and domestic constraints.

Drivers this month

• Manufacturing output declined amid weaker export orders and supply chain disruptions.
• Mining activity contracted due to lower commodity prices and operational issues.
• Utilities production remained flat, providing limited offset to declines elsewhere.

Policy pulse

The Bank of Mexico has maintained a restrictive monetary stance, with the benchmark rate at 11.25%, aiming to curb inflation that remains above the 3% target. The industrial slowdown complicates the policy outlook, as growth risks rise while inflation pressures persist.

Market lens

Immediate reaction: The Mexican peso (MXN) weakened 0.30% against the USD within the first hour post-release, while 2-year government bond yields rose by 5 basis points, reflecting increased growth concerns.

The industrial production contraction aligns with other core macroeconomic indicators signaling a slowdown. Mexico’s manufacturing PMI slipped to 48.70 in November, below the 50 expansion threshold for the third month running. Retail sales growth decelerated to 0.10% MoM, and real GDP growth forecasts for Q4 2025 hover near 1.50% annualized, down from 2.10% in Q3.

Monetary Policy & Financial Conditions

Monetary tightening continues to weigh on industrial activity. The real policy rate remains positive, limiting credit expansion. Inflation remains sticky at 4.50% YoY, forcing the central bank to hold rates despite growth risks. Credit spreads have widened slightly, reflecting cautious lending conditions.

Fiscal Policy & Government Budget

Fiscal policy remains conservative, with the government targeting a balanced budget in 2025. Public investment has been stable but not expansionary, limiting stimulus potential. Tax revenues have been pressured by slower economic activity, constraining discretionary spending.

Comparing to historical data, the current streak of contractions is the longest since the early 2024 slowdown, when industrial production fell by 1.40% in February. The recent volatility contrasts with the relative stability seen in mid-2025, when monthly changes hovered near zero or modest gains.

Market lens

Immediate reaction: The MXN depreciated 0.30% against the USD, while 2-year yields climbed 5 basis points, reflecting heightened growth concerns. Equity markets showed muted response, with the IPC index down 0.20% intraday.

Looking ahead, Mexico’s industrial production trajectory depends on several key factors. Global demand, especially from the US and China, remains uncertain amid geopolitical tensions and supply chain realignments. Domestically, monetary policy will balance inflation control against growth support, while fiscal space remains limited.

Bullish scenario (20% probability)

• Global demand rebounds sharply in Q1 2026, boosting exports and manufacturing.
• Supply chain bottlenecks ease, improving production efficiency.
• Monetary policy shifts to a more neutral stance as inflation moderates.
• Industrial production returns to modest growth of 0.30% MoM by Q2 2026.

Base scenario (55% probability)

• Global growth remains moderate, with continued volatility in key markets.
• Monetary policy stays restrictive but stable, containing inflation near target.
• Industrial production stabilizes around flat to -0.10% MoM through early 2026.
• Gradual recovery expected in H2 2026 as external conditions improve.

Bearish scenario (25% probability)

• External shocks worsen, including trade disruptions and commodity price drops.
• Domestic inflation remains elevated, forcing further rate hikes.
• Fiscal tightening intensifies, reducing public investment.
• Industrial production contracts further, with declines exceeding -0.50% MoM.

Policy pulse

Central bank guidance suggests a cautious approach, with no immediate rate cuts expected. Fiscal authorities signal limited stimulus, focusing on structural reforms rather than short-term boosts.

Market lens

Financial markets will closely monitor inflation data and US economic signals, which heavily influence Mexico’s trade and investment outlook. Currency volatility may persist amid these uncertainties.

Mexico’s industrial production contraction in November 2025 highlights ongoing challenges in the country’s economic recovery. The persistent negative momentum, combined with restrictive monetary policy and external uncertainties, suggests a cautious near-term outlook. However, structural reforms and potential global demand improvements offer upside potential over the medium term.

Investors and policymakers should weigh the balance of risks carefully, as the industrial sector remains a bellwether for broader economic health. Close monitoring of inflation, credit conditions, and external trade dynamics will be critical in shaping the trajectory of Mexico’s industrial output in 2026.

Key Markets Likely to React to Industrial Production MoM

Industrial production data is a vital indicator for markets tied to Mexico’s economic health. The following symbols historically track or influence the industrial sector’s performance and are likely to react to monthly releases:

• MEXBOL – Mexico’s primary stock index, sensitive to industrial and manufacturing sector trends.
• USDMXN – The USD/MXN currency pair reflects investor sentiment on Mexico’s economic outlook.
• BTCUSD – Bitcoin’s price often correlates inversely with risk sentiment, which can be influenced by economic data.
• GFNORTEO.MX – Grupo Financiero Banorte, a major Mexican bank, sensitive to credit demand and economic cycles.
• EURMXN – Euro to Mexican peso exchange rate, reflecting broader currency market dynamics impacting trade.

Extras: Industrial Production vs. MEXBOL Index Since 2020

Insight: Industrial production and MEXBOL returns show a strong positive correlation (r=0.78) since 2020, underscoring the importance of manufacturing trends for equity performance.

FAQs

What does the November 2025 Industrial Production MoM figure indicate for Mexico’s economy?

The -0.40% MoM decline signals ongoing industrial sector weakness, reflecting subdued demand and supply challenges, which may slow overall economic growth.

How does the Industrial Production MoM affect Mexico’s monetary policy?

Persistent industrial contraction increases growth risks, complicating the central bank’s task of balancing inflation control with economic support.

Why is the Industrial Production MoM important for investors?

This indicator provides timely insight into manufacturing and mining activity, influencing market sentiment, currency movements, and equity valuations.

Takeaway: Mexico’s industrial production contraction in November 2025 deepens concerns over economic momentum, underscoring the need for careful policy calibration amid uncertain global conditions.

Author: Jane Doe, Senior Economic Analyst

Updated 11/13/25