MexECON Blog

May Consumer Confidence Rises

In a report on Friday, Mexico's May consumer confidence index rose by a seasonally-adjusted 0.8%.  The rise came after declines of 3.1% in April and 0.7% in March - the first back-to-back decreases in optimism since early 2010.  According to the report, from the official statistics agency INEGI, the rebound in confidence during May came entirely from a 5.9% jump in the subindex on consumer willingness to buy durable goods and a 0.2% rise in the subindex on consumers' future expectations for their own family.  Among the three subindexes posting declines in May, the worst performance came in the one on consumers' view of the current economic situation in the country as a whole.  That subindex was down 1.1%, marking its third straight monthly decline.

Comment:  The rebound in optimism during May suggests consumer demand in Mexico could continue to rise modestly, helping take up some of the slack as the industrial sector appears to be hitting a soft spot.  Nevertheless, the abruptness of the slowdown in exports and industrial activity is a warning sign.  If economic activity slows significantly further, the Mexican consumer could start to retrench again, and the country as a whole could face a period of much slower growth.  At this point, however, there is no indication that the economy will fall or that the country will enter a new recession.

Patrick Fearon, CFA
Vice President, Fund Management

                               Mexican Consumer Confidence
                       Seasonally-Adjusted, January 2003 = 100
                                              Source:  INEGI
Consumer Confidence 1105

0 comment(s) for “May Consumer Confidence Rises”

    Leave a Comment