MEXICO CITY, (Reuters) – Mexico’s manufacturing sector remained unchanged in November compared to October. It shrank for 21 consecutive months as supply-side bottlenecks continued weighing and input costs soared, a survey revealed on Wednesday.

Below the threshold of 50, IHS Markit Mexico ManufacturingPurchasing Managers’ Index climbed slightly to 49.4 in Nov from 49.3 October.

In the midst of the outbreak caused by the coronavirus, the index fell to 35.0 in March 2020. That was the lowest reading ever recorded in the 10-1/2 year survey history.

According to the survey, this new reading indicated a continued decline in manufacturing’s health, but the contraction was still mild when compared with those since COVID-19.

Pollyanna de Lima, IHS Markit Economics Associate Director, stated that “the performance of Mexican manufacturing was once again negatively affected by supply chain restrictions, though subdued market conditions partially contributed to the latest contractions in output.”

Data last week showed that Mexico’s economy contracted 0.4% https://www.reuters.com/markets/us/mexican-economy-shrinks-more-than-expected-third-quarter-2021-11-25 in the third quarter, receding faster than previously thought as services slumped and supply chain issues bit, challenging the central bank as it juggles record inflation, a weak peso and leadership changes.

De Lima said that some companies had indicated having bought fewer inputs as a result of high prices on many products, exacerbating stock-replenishing difficulties resulting from longer delivery times.

De Lima stated that the survey showed inflationary pressures remain high, with the most recent increase in input prices the strongest in more than three years.

The Mexican annual inflation rose faster than anticipated in November’s first half to over 7%. This is the highest level in more than 20 years.