MEXICO CITY, (Reuters) – Mexico’s manufacturing sector fell for 22 consecutive months in December as prices rose and supply-side bottlenecks caused severe delivery delays, according to a Monday survey.

Although the IHS Markit Mexico Manufacturing purchasing managers’ index was unchanged in November at 49.4, it was still lower than November but not below the 50 threshold which distinguishes between growth and contraction.

Since March 2020, the index has remained under that threshold each month. It plummeted below 35.0 in April 2020 due to the effects of the coronavirus epidemic. This was the lowest reading for the survey in its 10-1/2-year history.

“2021 was not an excellent year for Mexican producers, and December was no exception.” According to Pollyanna de Lima, IHS Markit Economics Associate Director, the latest PMI data revealed further contractions in production, new orders, and exports with their respective sequences of decreases extending up to 22 months.”

The survey found that goods manufacturers again stated that transport problems, restricted container availability, and global shortages in raw materials led to severe delays in the average lead time. Meanwhile, input costs were higher due to supply chain issues in December.

It was third in terms of overall purchasing price inflation.

According to INEGI, the Mexican National Statistics Agency, inflation in December reached 7.45%. It had been averaging 7.37% in November. That was the highest in Mexico since 2001.

De Lima explained that the demand for goods was still sluggish due to increasing market uncertainties, falling prices, and inability to deliver products on time because of lingering issues sourcing raw material.

De Lima said that “worryingly” companies do not expect price pressures and supply-side problems to subside in 2022.