MexECON Blog

October Retail Sales Rise 0.8 Percent

Mexican retail sales rose by a seasonally-adjusted 0.8% in October, after declines of 0.4% in September and 1.5% in August.  The increase in October was the best since January, but it did little to offset the general weakness in retail demand over the course of the year.  On an unadjusted, constant-price basis, sales in October were down 1.1% from the same month one year earlier.  The retail subsectors posting year-over-year declines in October were furniture, domestic appliances, and computers; recreational, paper, and personal products; food and beverages; healthcare; department stores; and clothing, footwear, and textile goods.  The only retail subsectors to post year-over-year sales increases were motor vehicles, fuels, and lubricants and metal and glass products.

At the wholesale level, October sales jumped 4.9%, marking their biggest increase in at least several years.  However, the increase reversed only a portion of the revised declines of 3.4% in September and 2.3% in August.  Wholesale receipts in October were down 1.7% year-over-year.

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

Comment: The jump in retail activity during October is good to see, but a rise in just one month does not necessarily mean that consumer demand is starting to strengthen in a sustained way.  While Mexican unemployment appears to be falling again, the declines are very slow, and consumer confidence continues to wane.  The country's exports are rising again, which would normally be a good harbinger for the future, but consumers are surely aware of the ongoing declines in domestic activity such as public works, housing construction, and overall investment.  As I discussed yesterday in my analysis of the new figures on gross domestic product, the main thing that allowed the Mexican economy to return to growth in the third quarter was a big drop in imports (especially capital goods imports).  I fear that the ongoing weakness in domestic demand will keep the economy from accelerating much further in the near term.

Patrick Fearon, CFA
Vice President, Fund Management

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

Retail Sales 1310

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

Wholesale Sales 1310

Mexican retail sales rose by a seasonally-adjusted 0.8% in October, after declines of 0.4% in September and 1.5% in August.  The increase in October was the best since January, but it did little to offset the general weakness in retail demand over the course of the year.  On an unadjusted, constant-price basis, sales in October were still down 1.1% from the same month one year earlier.  The retail subsectors posting year-over-year declines in October were furniture, domestic appliances, and computers; recreational, paper, and personal products; food and beverages; healthcare; department stores; and clothing, footwear, and textile goods.  The only retail subsectors to post year-over-year sales increases were motor vehicles, fuels, and lubricants and metal and glass products.
At the wholesale level, October sales jumped 4.9%, marking their biggest increase in at least several years.  However, the increase reversed only a portion of the revised declines of 3.4% in September and 2.3% in August.  Wholesale receipts in October were down 1.7% year-over-year.
The report was released today by INEGI, the official statistics agency.
Comment:  The jump in retail activity during October is good to see, but a rise in just one month does not necessarily mean that consumer demand is starting to strengthen in a sustained way.  While Mexican unemployment appears to be falling again, the declines are very slow, and consumer confidence continues to wane.  The country's exports are rising again, which would normally be a good harbinger for the future, but consumers are surely aware of the ongoing declines in domestic activity such as public works, housing construction, and overall investment.  As I discussed in my analysis of yesterday's new figures on gross domestic product, the main thing that allowed the Mexican economy to return to growth in the third quarter was a big drop in imports (especially capital goods imports).  I fear that the ongoing weakness in domestic demand will keep the economy from accelerating much further in the near term.
Patrick Fearon, CFA
Vice President, Fund Management
Mexican Retail Sales
Seasonally Adjusted, 2003 = 100
Source:  INEGI
Mexican Wholesale Sales
Seasonally Adjusted, 2003 = 100
Source:  INEGI

 

 

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