MexECON Blog

August Retail Sales Fall 1.4 Percent

Mexican retail sales fell by a seasonally-adjusted 1.4% in August, more than erasing the revised increases of 0.3% in July, 0.1% in June, and 0.6% in May.  On an unadjusted, constant-price basis, sales in August were down 2.2% from the same month one year earlier.  The retail subsectors posting year-over-year declines in August were recreational, paper, and personal products; food and beverages; metal and glass products; furniture, domestic appliances, and computers; department stores; clothing, footwear, and textile goods; and motor vehicles, fuels, and lubricants.  The retail only retail subsector to post a year-over-year increase was healthcare.

At the wholesale level, August sales fell 1.9%, erasing a revised increase of 0.8% in the previous month.  Wholesale receipts in August were down 7.1% year-over-year.

The report was released today by INEGI, the official statistics agency.

Comment:  A range of indicators has shown that Mexico is in danger of slipping into recession.  As I mentioned after the retail sales report last month, the modest strengthening in consumer demand over the early summer was perhaps the best chance for Mexico to keep growing, but the big fall in August retail activity shows the consumer may not come to the rescue after all.  With Mexican GDP having fallen in the second quarter, it would only take a decline in the third quarter for the country to meet the customary definition of a recession.

Patrick Fearon, CFA
Vice President, Fund Management

                                                Mexican Retail Sales
                                        Seasonally Adjusted, 2003 = 100
                                                    Source:  INEGI
Retail Sales 1308

                                              Mexican Wholesale Sales
                                           Seasonally Adjusted, 2003 = 100
                                                      Source:  INEGI
Wholesale Sales 1308

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