MexECON Blog

May Retail Sales Rise 0.7 Percent

Mexican retail sales rose by a seasonally-adjusted 0.7% in May, almost reversing their 0.8% decline in April.  Without seasonal adjustments, and not counting price changes, sales in May were up 0.1% from the same month one year earlier.  The retail subsectors posting year-over-year increases in May were clothing, footwear, and textiles; food and beverages; motor vehicles, fuels, and lubricants; and healthcare.  Sales fell from the previous year at stores associated with recreational, paper, and personal products; department stores; furniture, domestic appliances, and computers; and metal and glass products.

At the wholesale level, sales fell 0.1% in May, after a revised 2.6% drop in the previous month.  May wholesale receipts were down 6.9% year-over-year.

Comment:  The rise in retail activity during May is a good thing, but it does nothing to change the uninspiring picture for this important sector of the Mexican economy.  Sales are far weaker than they were in summer 2012.  Sales have recovered a bit from their plunge in December, but they have stagnated over the last several months.  The weakness in retailing is consistent with recent data that suggests the overall Mexican economy is hitting another soft spot, just as it did at the turn of the year.  This slowdown has kept unemployment from falling further.  In addition, consumer confidence has weakened considerably.  To make matters even worse, the continuing sharp decline in wholesale demand suggests retailers see little hope for a near-term improvement.

Patrick Fearon, CFA
Vice President, Fund Management

                                                     Mexican Retail Sales
                                              Seasonally Adjusted, 2003 = 100
                                                        Source:  INEGI
Retail Sales 1305

                                                Mexican Wholesale Sales
                                             Seasonally Adjusted, 2003 = 100
                                                        Source:  INEGI
Wholesale Sales 1305

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