MexECON Blog

Consumer Confidence Rises Further

Mexico's October consumer confidence index rose to a seasonally-adjusted 91.1, after a revised 90.5 in September and 88.4 in August.  The index now stands at its highest level since November 2013.  According to the report, the rise in October came entirely from two of the five subindexes.  The subindex on consumers' view of the current situation for their own family increased to a 5-month high of 97.5, while the subindex on consumers' willingness to buy durable goods rose to a 13-month high of 77.8.  In contrast, the subindex on consumers' future expectations for their own family decreased slightly to 98.3.  The subindex on consumers' view of the current situation for the country as a whole dropped sharply to 91.9, though that followed a huge rise in the previous month, and the subindex on their future expectations for the country edged down to 89.7.

The report was released on Wednesday by INEGI, the official statistics agency.

Comment:  Mexico's consumer confidence index is designed so that readings of 100 reflect the level of optimism in 2003.  The index fell sharply around the turn of the year, mostly because of new sales taxes that took effect in January, but it has generally been trending upward since then.  For one thing, consumers are adjusting to the new taxes.  In addition, Mexican exports and construction activity have both been rebounding.  Manufacturing activity has been strengthening, and companies have been hiring more.  If the labor market continues to improve, wages could start climbing faster, and consumer confidence and spending would likely keep rising.

Patrick Fearon, CFA
Vice President, Fund Management

Consumer Confidence 1410

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