Mexico: Strong recovery in consumer sentiment loses steam
April 5, 2011
After making a strong comeback last year, the recovery in consumer sentiment seems to be losing momentum, pointing to a protracted recovery in private consumption. In March, the index of consumer confidence (ICC, indice de Confianza del Consumidor) dropped 0.5 points to 91.7 points. The reading surprised the market on the downside, as analysts had expected consumer confidence to rise to 93.5 points. In addition, a month-on-month analysis corroborates the moderation as the ICC dropped 0.4% in seasonally adjusted terms. Finally, the index remains below the 100-point threshold that separates optimism from pessimism. The monthly deterioration was mainly driven by a significant drop in the respondents' willingness to buy durable consumer goods (-1.8% mom) as well as by a deterioration in their assessment of the current state of the economy (-1.9% mom).