MexECON Blog

Consumer Confidence Rebounds in February

Mexico's February consumer confidence index rose to a seasonally-adjusted 92.7, after dipping to 91.8 in January.  With its rise in February, the index is now back where it was in December, though it is still below its most recent high of 94.5 in November.  According to the report, the rebound in February came entirely from stronger readings in two of the five subindexes.  The subindex on consumers' future expectations for their own family rose to 101.4, and the subindex on their willingness to buy durable goods jumped to 84.3.  In contrast, the subindex on consumers' view of the current situation for their own family retreated for a second straight month, falling to 98.1.  The subindex on their future expectations for the country as a whole fell to 89.3, while the subindex on their view of the current situation for the country as a whole dropped to 87.4.

The report was released today 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 ahead of the new sales taxes that took effect in January 2014, but it has been on an uptrend ever since.  That does not mean that optimism hasn't pulled back from time to time.  It certainly has.  Nevertheless, consumer confidence in Mexico is clearly improving, and I have been arguing that the recent drop in unemployment and a moderation in inflation will probably boost optimism further in the coming months.  There is some risk that continued low oil prices and the falling peso could cause some consumers to become more cautious, but as long as Mexican exports, manufacturing, and private investment continue to trend upward, I think overall confidence will continue to improve.

Patrick Fearon, CFA
Vice President, Fund Management

Consumer Confidence 1502

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