Mexican retail sales fell by a seasonally-adjusted 0.1% in
February, after rising 2.1% in January. Without seasonal
adjustments, but stripping out price changes, sales in February
were down 2.6% from the same month one year earlier. The
retail subsectors posting the biggest year-over-year declines in
February were those associated with clothing, footwear and
textiles; department stores; recreational, paper, and personal
products; food and beverages; and healthcare. Sales rose from
the previous year at stores associated with metal and glass
products; motor vehicles, fuels, and lubricants; and furniture,
domestic appliances, and computers.
At the wholesale level, sales fell 0.9% in February, erasing all
of their 0.3% rise in January. Wholesale receipts in February
were down 8.5% from the same month one year earlier.
Comment: Some Mexican economic
sectors have begun to recover from their soft spot at the turn of
the year, but wholesale and retail trade still look weak.
That is a significant challenge for Mexico because domestic demand
has been the main source of economic growth in recent
quarters. Some of the problem probably stems from a recent
spike in food costs. A new outbreak of avian influenza has
forced the culling of millions of birds from commercial farms, and
chicken and egg prices have surged in response. However,
consumer demand was weakening even before the avian flu problem
surfaced, so there are clearly other sources of weakness as
well. The question now is how much longer it will take before
retail and wholesale activity start to recover.
Patrick Fearon, CFA
Vice President, Fund Management
Mexican Retail Sales
Adjusted, 2003 = 100
Mexican Wholesale Sales
Seasonally Adjusted, 2003 = 100