MexECON Blog

Consumer Confidence Falls to 95.5

Mexico's May consumer confidence index fell to a seasonally-adjusted 95.5, compared with a revised 96.1 in April.  According to the report, released Tuesday by the official statistics agency INEGI, the decline in May was broad based, with decreases in all five subindexes.  The subindex on consumers' future expectations for the country as a whole fell 1.7% to a level of 102.6, while the subindex on their future expectations for their own family fell 1.7% to a level of 101.1.  The subindex on consumers' view of the current situation for their own family declined 1.6% to 95.5, but the subindex on consumers' view of the whole country's current situation decreased only 0.3% to 96.6.  The subindex on consumers' willingness to buy durable goods edged down 0.2% to a reading of 80.5.

Comment:  Mexico's consumer confidence index is designed so that readings of 100 reflect the level of optimism prevailing in 2003.  The index approached that level in late 2012, before falling back in the midst of an economic soft spot at the turn of the year.  Several sectors of the Mexican economy now appear to be in a tentative rebound from the year-end soft spot.  In spite of the small decline in May, consumer optimism also seems to be probing for a floor.  If U.S. demand continues to grow and there is no new worsening of the European debt crisis, this means that the most likely scenario going forward is for the Mexican economy to settle into a period of moderate growth.

Patrick Fearon, CFA
Vice President, Fund Management

Consumer Confidence 1305

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