MexECON Blog

Consumer Confidence Rises Slightly

Mexico's November consumer confidence index rose by a seasonally-adjusted 0.1%, after a revised 2.8% gain in October.  According to the report, from the official statistics agency INEGI, the small increase in November stemmed from increases in just two subindexes.  The subindex on consumers' willingness to buy durable goods jumped 4.8%, matching a similar 4.8% rise in October and marking its strongest back-to-back increases since last December and January.  The subindex on consumers' future expectations for the country as a whole edged up 0.1%, after rising 2.2% in the previous month.  In contrast, the subindex on consumer views about the current situation for the country as a whole dropped 1.4%, and the subindex on their view of the current situation of their own family fell 3.0%.  The worst performance came in the subindex on consumers' future expectations for their own family.  That subindex fell 3.9%.

Comment:  Today's report suggests Mexicans have taken notice of the country's surprisingly strong economic performance of late.  With rising exports and an increasingly competitive industrial sector, hiring is up, and more consumers are willing to make big-ticket purchases.  Nevertheless, Mexican consumers are probably still concerned about rapidly rising prices.  The latest data show inflation moderated a bit to 4.6% in October, but if prices fail to cool more significantly, optimism could falter and Mexicans may ratchet back their spending.
Patrick Fearon, CFA
Vice President, Fund Management

                                         Mexican Consumer Confidence
                                          Seasonally Adjusted, 2003 = 100
                                                    Source:  INEGI
Consumer Confidence 1211

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