MexECON Blog

Consumer Confidence Continues Falling

Mexico's March consumer confidence index fell to a seasonally-adjusted 94.9, down from revised readings of 96.5 in February, 97.4 in January, and 98.8 in December.  According to the report, released today by the official statistics agency INEGI, the decline in March came in part from a big fall in the subindex on consumers' willingness to buy durable goods.  That subindex dropped 3.9% to a six-month low of 77.6.  Likewise, the subindex on consumers' assessment of the current situation for the country as a whole fell 2.5% to 96.3.  The subindex on their future expectations for the country declined 2.2% to 101.0, and the subindex on their view of the current situation for their own family edged down 0.5% to 95.6.  The only subindex to post an increase in March was the one on consumers' future expectations for their family.  That subindex jumped 2.7% to 105.3, its highest level in at least five years.

Comment:  Mexico's consumer confidence index is designed so that readings of 100 reflect the average level of optimism in 2003.  After hitting its most recent low in May 2009, the index climbed almost back to 100 before retreating again in the first three months of 2013.  The Mexican economy hit a soft spot at the turn of the year, so it is no wonder that optimism has softened.  Fortunately, the most recent reports point to at least a partial rebound in some sectors.  Consumer confidence and consumption spending could also start to rebound in the coming months.  The thing to keep in mind is that weak growth overseas and softness in some aspects of domestic demand could limit any reacceleration in the economy.

Patrick Fearon, CFA
Vice President, Fund Management

Consumer Confidence 1303

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