Bad sign: consumption decreases for the third consecutive month

Inegi explains that the Monthly Indicator of Private Consumption in the Internal Market (IMCPMI) that it produces monthly “measures the behavior of spending by households resident in the country on consumer goods and services, both of national and imported origin; purchases of homes or valuable objects are excluded ”.

Yesterday, Inegi released the IMCPMI for August, which stood at 112.9. It was the third consecutive month to decline after reaching 113.8 in May, its highest level since March 2020, when due to the Covid-19 pandemic it plunged to 88.4.

Let us remember how the Indicator has behaved since President Andrés Manuel López Obrador took office.

In December 2018 it stood at 116.2, in January 2019 it recovered slightly to 116.7 and in June it reached 118.3, which is the highest level that has been reached during the government of Q4.

As of June 2019, it began to decline to 116.3 in February 2020.

Then it began to plummet: to 112.7 in March, to 90.3 in April, and to 88.4 in May 2020.

In June of last year a slow recovery began and in January 2021 it reached 109.2. And it continued to climb until reaching 113.8 last May.

The third consecutive fall of the Indicator should worry us because it shows that since June the consumer has stopped spending.

Now, compared to August 2020, the IMCPMI definitely registered an important increase, of 9.6%. Regarding national goods and services, it increased 8.2% and 20.9% for imported goods. As far as nationals are concerned, the consumption of goods rose 4.7% and that of services 11.7 percent.

The behavior of the Indicator for the January-August period of this year is positive, in total consumption increased 8.7% compared to the same period last year. The increase for national goods was 5.3% and that for services was 11.5%, while for imported goods it was 25.9%. Regarding national goods, the consumption of durable goods increased 21.5%, semi-durable 30.5% and non-durable 4.4 percent. In the case of imported goods, the consumption of durable goods rose 42.2%, semi-durable 18.4% and non-durable 23.4 percent.

Due to all of the above, we should be concerned because since May 2020, consumption has been increasing steadily without registering downward trends, and as of last June this trend was reversed.

A drop in consumption not only indicates that there is less money in consumers’ pockets, but that companies that manufacture and distribute products or provide services have less income and are at one point forced to lay off employees to continue surviving.

The IMCPMI for August indicates that there is an impoverishment of the population and problems for tens of thousands of companies.

The Mexican economy faces an even more difficult future. Inflation does not yield and analysts consulted by Citibanamex recently raised their estimate to 6.50-6.70 percent.

Faced with this reality, the government of the 4T insists that “we are doing well.” It is likely that President Andrés Manuel López Obrador has other information on this as well.

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Eduardo Ruiz-Healy

Journalist and producer

Guest column

Opinioner, columnist, lecturer, media trainer, 35 years of experience in the media, micro-entrepreneur.

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