Mexico's May consumer confidence index rose 0.2%, after revised
increases of 2.4% in April and 0.8% in March. According to
the report, released Monday by the official statistics agency
INEGI, the small increase in May reflected gains in three of the
five subindexes. The subindex on consumers' future
expectations for the country as a whole rose 0.7%, marking its
third straight monthly increase. The subindex on consumers'
future expectations for their own family rose 0.5%, while the
subindex on consumers' willingness to buy durable goods edged up
0.1%. In contrast, there were significant pullbacks in the
subindexes on consumers' views of the current situation of their
own family and of the country as a whole.
Comment: The minimal gain in
optimism last month is consistent with the sharp slowdown in
Mexico's May purchasing managers index for the factory
sector. That index, released yesterday, showed a big slowdown
in new orders and production. Moreover, recent data from
abroad has pointed to weaker demand around the globe.
Mexico's consumer sector still has some momentum, and optimism
could get a boost after the July presidential election.
Nevertheless, continued bad news regarding issues such as the
European debt crisis and the weakening U.S. labor market could push
Mexican consumer confidence downward in the near future.
Mexican economic growth has been coming in large part from consumer
demand in recent quarters, so if the Mexican consumer pulls back,
it could have important ramifications for the country's
Patrick Fearon, CFA
Vice President, Fund Management
Mexican Consumer Confidence
Seasonally-Adjusted, January 2003 = 100