Background on the Indicator Global of Business Opinion Confidence (IGOEC)
The Indicator Global of Business Opinion Confidence (IGOEC) has reported its fourth consecutive month of decline, reaching its lowest level since January 2023. This reflects the persistent pessimism among business owners in manufacturing, construction, retail, and private non-financial services sectors.
Key Figures from the April Report
- Deseasonally adjusted, the IGOEC stood at 48.6 points in April, marking a monthly decrease of 0.6 points and an annual drop of 6.2 points.
- The IGOEC has been below the 50-point threshold for two consecutive months, indicating increased caution from businesses regarding the current and future economic situation of the country as well as their own companies.
Expert Analysis from Janneth Quiroz, Director of Economic Analysis at Monex, Casa de Bolsa
Janneth Quiroz, Director of Economic Analysis at Monex, Casa de Bolsa, explained that business owners in Mexico’s four key economic sectors will remain “cautious” due to weak economic growth in the first quarter of 2023 and uncertainties surrounding global trade and domestic political environment, including ongoing reforms and the extinction of autonomous bodies.
Sector-wise Confidence Levels in April
- Manufacturing: With a confidence level of 48.5 points, the manufacturing sector experienced a monthly decline of 1.2 points. Concerns focused on investment expectations (-3.2 pts) and the future economic situation of their companies (-1.3 pts).
- Retail: The retail sector’s confidence dropped to 47.4 points, a decrease of 1.8 points. Business owners expressed worry about the future economic situation of their companies (-2.9 pts) and current investment conditions (-2.3 pts).
- Construction: Although the construction sector’s confidence increased slightly by 0.1 points compared to March (46.9 points), it has been below the 50-point mark for eight consecutive months. Pessimism intensified regarding the country’s and companies’ economic perspectives, with a 1.5-point decrease in perceived confidence.
- Private Non-Financial Services: The private non-financial services sector maintained a near-stable confidence level of 49.7 points (+0.2 pts). However, concerns persist about the future economic situation of their companies, with a 1.4-point decrease in perceived confidence.
Key Questions and Answers
- What is the Indicator Global of Business Opinion Confidence (IGOEC)? The IGOEC is an average measure of business confidence levels from the manufacturing, construction, retail, and private non-financial services sectors in Mexico.
- Why is the IGOEC important? The IGOEC serves as a barometer for business sentiment, indicating the overall health and future prospects of Mexico’s key economic sectors.
- What factors contribute to the recent decline in business confidence? Weak economic growth in Q1 2023, uncertainties surrounding global trade, domestic political environment changes, and ongoing reforms have led to increased caution among business owners.
- Which sectors are most affected by the decline in business confidence? All four sectors—manufacturing, construction, retail, and private non-financial services—have experienced a decline in confidence levels, with manufacturing and retail showing more pronounced drops.
