MexECON Blog

June Retail Sales Rise 0.1 Percent

Mexican retail sales rose by a seasonally-adjusted 0.1% in June, after a 0.7% gain in May.  However, sales were still down 1.9% from June 2012 on an unadjusted, constant-price basis.  The retail subsectors posting year-over-year decreases in June were recreational, paper, and personal products; food and beverages; healthcare; motor vehicles, fuels, and lubricants; department stores; metal and glass products; and furniture, domestic appliances, and computers.  The only retail subsector to post an increase in sales was clothing, footwear, and textile goods.

At the wholesale level, June sales rose 0.6%, accelerating from a revised 0.2% increase in the previous month.  Nevertheless, wholesale receipts in June were still down 8.5% year-over-year.

Comment:  Stagnant exports, tight government spending, and reduced construction activity have all weighed heavily on the Mexican economy this year.  Hiring has come nearly to a standstill, and consumer spending has fallen back.  In my view, it will be difficult for the economy to accelerate appreciably in the coming months as some observers expect.  Even if U.S. demand strengthens and the Mexican government starts spending more, it currently seems far-fetched to think that the improvements will be dramatic.  All the same, there is a potential glimmer of hope in today's data on wholesale activity.  Not only did wholesale receipts grow at a faster pace in June than they did in May, but the back-to-back increases were the first since mid-2012.  If Mexican wholesale demand continues to rise in the coming months, it would suggest that retailers are seeing at least some stabilization in consumption spending and potentially a return to increased sales.

Patrick Fearon, CFA
Vice President, Fund Management

                                                Mexican Retail Sales
                                        Seasonally Adjusted, 2003 = 100
                                                    Source:  INEGI
Retail Sales 1306

                                             Mexican Wholesale Sales
                                          Seasonally Adjusted, 2003 = 100
                                                      Source:  INEGI
Wholesale Sales 1306

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