Introduction to the Mexican Consumer Confidence Index (ICC)
The Mexican Consumer Confidence Index (ICC) experienced another decline in October, according to data released by the National Institute of Statistics and Geography (Inegi). The ICC reported a score of 46.1 points in October, a monthly decrease of 0.3 points.
October’s Decline: Second Consecutive Month and Seventh Monthly Drop
This marks the second consecutive month and seventh month of decline for the ICC. Compared to October last year, the index plummeted by 3.2 points.
Economic Uncertainty and Slowing Economy
The recent dip in consumer confidence coincides with a period of uncertainty and a slowing Mexican economy. Although the country has avoided a recession, its economic growth has cooled down. The latest PIB Oportuno data revealed that the third quarter of the year saw a 0.3% trimestral and annual contraction in economic activity.
Sectoral Breakdown: Industrial Sector’s Decline
The industrial sector has been the primary driver of this slowdown, with a 1.5% trimestral and 2.9% annual decline compared to the previous periods.
Component Analysis: Pessimistic Outlook
According to the Inegi report, jointly produced with Banco de México (Banxico), four out of five components of the ICC experienced a decline in October.
- Economic Situation Expectation: The component reflecting the expected economic situation in 12 months fell by 0.8 points.
- Purchase Possibilities of Appliances and Furniture: This component decreased by 0.6 points, despite stable inflation within Banxico’s target range.
- Current Economic Situation Perception: The perception of the current economic situation dropped by 0.3 points.
- Expected Economic Situation for the Household: This component declined by 0.1 points.
Personal Financial Situation: Mixed Indicators
Inegi also published complementary indicators of the ICC, with only four out of ten showing decreases in October.
- Personal Economic Situation: This component fell by 0.7 points in October.
- Savings Possibilities: This component expanded by 1.8 points in October.
Key Questions and Answers
- Q: What is the Mexican Consumer Confidence Index (ICC)?
A: The ICC is a measure of consumer confidence in Mexico, which reflects the public’s perception of their current and future economic situations. - Q: Why did the ICC drop in October?
A: The ICC fell due to declines in four out of its five components, including expectations for the national economy, purchase possibilities of appliances and furniture, perception of the current economic situation, and expected household economic situation. - Q: How is the Mexican economy performing?
A: Although avoiding a recession, the Mexican economy has slowed down. The third quarter of 2021 saw a 0.3% trimestral and annual contraction in economic activity, primarily driven by the industrial sector’s decline. - Q: What are the complementary indicators of the ICC?
A: Complementary indicators include personal economic situation and savings possibilities. In October, the personal economic situation fell by 0.7 points, while savings possibilities expanded by 1.8 points.
