Economics: Expanded confidence survey sheds light on geographic and income differences

MEXICO - Report 22 Mar 2022 by Mauricio Gonzalez and Francisco González

The National Statistics institute is providing us with a more illuminating picture of consumer confidence by publishing a more much disaggregated version of its National Consumer Confidence Survey (ENCO). What the disaggregated version lacks in timeliness (this much more detailed survey is released two months after Inegi publishes its traditional survey and the corresponding National Consumer Confidence Index) it more than compensates for by the insight it provides into how perceptions diverge depending on the region of the country in which respondents live, whether they reside in major cities as opposed to small towns and largely rural areas, and their incomes.

The North region consistently registers much higher levels of consumer confidence, but Central Mexico, including the nation’s capital, shows the lowest, while both the South and Central North regions as well as the national index tend to share a space in between.

Although differences in sentiment between inhabitants of cities with more than 300,000 residents and those in small towns and rural areas are not significant, the Expanded CCI’s Urban/Rural component shows a continuous intertwining of consumer confidence readings. Interestingly, when we look at the ICC’s component by income quintiles, a higher level of confidence is apparent among those in higher income brackets. However, while there are clear income differences, especially in relation to poverty levels, between urban and rural areas, there are no significant differences between the headline ICC readings from cities and those from towns and villages.

But it is on the level of income quintiles that we see the sharpest contrasts in signs of the extent to which the Mexican public’s perceptions and prospects vary. Through December, confidence was strongest among the highest income segment, and optimism steadily declined as we moved lower on the income scale. In short, the report suggests the extent to which pessimism grew among the middle classes.

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