MEXICO CITY, March 1 (Reuters) - Mexico’s factories suffered their 12th straight month of deteriorating business conditions in February as output and new orders declined sharply and firms cut headcounts, input purchasing and inventories due to the coronavirus pandemic, a survey showed on Monday. The IHS Markit Mexico Manufacturing Purchasing Managers’ Index rose to 44.2 in February from 43.0 in January, but remained well below the 50-threshold that separates growth from contraction. Even though February’s reading was the highest since last March and business sentiment hit a one year high, the figure underscored a sharp rate of contraction that was among the quickest seen since data collection started in April 2011, said IHS. “The latest PMI results show that Mexican manufacturers continued to lower production, employment, input purchasing and stocks due to ongoing declines in sales. Once again, the downturn was associated with the COVID-19 pandemic and business closures,” said Pollyanna De Lima, economics associate director at IHS Markit. De Lima said firms were starting to see the light at the end of the tunnel, with many expecting output growth over the next year on hopes vaccination programs pick up pace, tame the pandemic and lead to eased restrictions and a return to normality. Mexico’s economy in 2020 suffered its biggest annual contraction since the Great Depression of the 1930s. And despite a surge in new COVID-19 cases that put a damper on business in recent weeks, the economy recovered faster than first estimated during the fourth quarter. The PMI index tracks developments on a range of business indicators including prices, new orders, output, employment, suppliers’ delivery times and stocks of raw materials. (Reporting by Anthony Esposito; Ediitng by Chizu Nomiyama)