MexECON Blog

November Consumer Confidence Falls

Mexico's November consumer confidence index fell by a seasonally-adjusted 0.8%, erasing almost half the revised 1.7% gain in October and marking the third decline in the last four months.  The decline in November stemmed mostly from a 7.2% plunge in the subindex on consumers' willingness to buy durable goods.  It was the second straight monthly decline in that subindex, and it was its steepest drop since mid-2009.  The subindex on consumers' view of the current situation of their own family declined 2.2%, easily erasing the 0.2% increase in October.  On a more positive note, there were modest increases in the subindexes on consumers' view of their own family's future expectations, the current condition of the country as a whole, and future expectations for the country.  The report was released by INEGI, the official statistics agency.

Comment:  In spite of the decline in optimism during November, there is still significant evidence that domestic demand in Mexico has momentum.  For example, a report last week said unemployment in Mexico fell in October to its lowest level in almost three years.  There is even some hope on the international side of the economy, with a survey of U.S. purchasing managers showing new manufacturing orders accelerated significantly in November.  That should translate to higher demand for Mexican exports.  Economic risks are still skewed to the downside, mostly because of the continuing debt problems and slowing economic growth in Europe.  On balance, however, Mexico's domestic sector still looks healthy.

Patrick Fearon, CFA
Vice President, Fund Management

                                        Mexican Consumer Confidence
                              Seasonally Adjusted, January 2003 = 100
                                                      Source:  INEGI
Consumer Confidence 1111

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