Consumer confidence in Mexico hit a new record high in October, the first month of the six-year term of President Claudia Sheinbaum.

The national statistics agency INEGI reported Monday that the consumer confidence index (ICC) rose to 49.4 in October, an increase of 2 points compared to September and 3.4 points compared to the same month of 2023.

Consumer Confidence in Mexico increased to 49.40 points in October from 47.10 points in September of 2024.https://t.co/tgrU4uTZW6 pic.twitter.com/FlnUm02hO0

— TRADING ECONOMICS (@tEconomics) November 11, 2024

A score of 50 on the ICC represents an equal balance between optimism and pessimism.

The 49.4 score in October — calculated based on responses to a range of questions in the National Survey on Consumer Confidence (ENCO) — is the highest reading since the first ENCO was conducted in 2001.

The previous high was 48.5 in February 2019, three months into the six-year term of former president Andrés Manuel López Obrador. The month-over-month increase on the ICC in October was the highest since November 2021.

Consumer confidence increased in October despite inflation ticking up to an annual headline rate of 4.76% from 4.58% in September and the weaker position of the Mexican peso compared to earlier in the year.

It appears likely that the swearing-in of Sheinbaum as Mexico’s first female president on Oct. 1 buoyed confidence.

The newspaper El Financiero reported that the commencement of her six-year term “injected optimism” into Mexicans in terms of their perception of the national economy and their own purchasing power.

ENCO results in detail 

INEGI, in conjunction with the Bank of Mexico, conducted the ENCO at 2,336 homes in cities across all 32 federal entities during the first 20 days of October.

The survey asked respondents about:

• Their current household economic situation compared to a year earlier.
• Their expected household economic situation over the next 12 months.
• Their opinion about Mexico’s current economic situation compared to 12 months earlier.
• Their opinion about Mexico’s expected economic situation over the next 12 months.
• Their current capacity to purchase furniture, a television, a washing machine and other home appliances compared to their capacity 12 months earlier.

Their responses — derived from the options of much better, better, the same, worse and much worse with regard to the first four questions, and greater, the same or lesser with respect to the fifth — were weighted and used to formulate the ICC score.

The biggest driver of the month-over-month increase in consumer confidence was a jump of 4.2 points in the sub-index that measures people’s outlook for the Mexican economy over the next 12 months. The score for that sub-index rose to 55.4, indicating cautious optimism even though economic growth in Mexico is forecast to continue to slow in 2025.

The annual increase in the national economic outlook sub-index was 7.4 points.

The four other sub-indexes also increased in October compared to September and compared to a year earlier. Three of the five sub-indexes had scores above 50.

The highest sub-index score was a record-high 60.8 for the one that measures people’s opinions on their expected household economic situation over the next 12 months. The lowest sub-index score was 31.6 for the one that assesses people’s current capacity to make a home appliance purchase.

The survey also found that Mexicans were more optimistic in October than a month earlier about their capacity to save some of their income, go on a vacation in the next 12 months and buy a car (new or used) in the next two years.

What’s the outlook for consumer confidence?

The Monex financial group said in an analysis that “going forward, we don’t rule out a rebalancing in consumer confidence.”

It cited factors that could have both a positive and negative impact on confidence.

A decline in inflation and interest rate cuts could improve consumer confidence, while one factor that could cause it to deteriorate is an economic slowdown, Monex said.

The financial group also said that “the political agenda” in the United States during the second Trump presidency could have an impact on consumer confidence in Mexico.

With reports from El Financiero and El Economista