MexECON Blog

March Retail Sales Rise 0.8 Percent

Mexican retail sales rose in March by a seasonally-adjusted 0.8%, though the increase followed revised declines of 0.9% in February, 0.4% in January, and 2.4% in December.  On an unadjusted, constant-price basis, sales in March were up a modest 1.7% from the same month one year earlier.  The retail subsectors posting year-over-year sales increases in March were motor vehicles, fuels, and lubricants; metal and glass products; food and beverages; and recreational, paper, and personal products.  Sales declined on a year-over-year basis in the categories of healthcare; department stores; clothing, footwear, and textile goods; and home décor, domestic appliances, and computers.

At the wholesale level, March sales rose 0.1%, after declines in both February and January.  Wholesale receipts in March were up 3.8% year-over-year.

Comment:  The rise in retail sales during March is welcome, but it erased only part of the declines over the last several months.  The trend in Mexican retail demand remains slightly negative.  One problem has been the rise in sales taxes at the beginning of 2014, but the impact of that should dissipate over the coming months.  A bigger problem is the continuing slack in the labor market.  A significant jump in retail sales would probably require a big improvement in hiring.  In turn, that would probably depend on much stronger exports, investment, and industrial activity.  Unfortunately, there is little sign of that happening as yet.  Mexican economic growth is therefore likely to remain lethargic in the coming months.

Patrick Fearon, CFA
Vice President, Fund Management

                                                        Mexican Retail Sales
                                              Seasonally Adjusted, 2003 = 100
                                                             Source:  INEGI
Retail Sales 1403

                                                Mexican Wholesale Sales
                                           Seasonally Adjusted, 2003 = 100
                                                       Source:  INEGI
Wholesale Sales 1403

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