Mexico’s businessmen are not confident about the national economy

MEXICO – In the midst of a modest growth of the economy and the inflationary wave, the construction, manufacturing, commerce and non-financial private services sectors reduced their expectations about the national economy and the dynamism of their economic units.

During June 2022, the businessmen who most strongly reduced their level of confidence were those in the non-financial private services sector. In just one month they cut their business confidence level by 4.4%, according to seasonally adjusted figures from Inegi.

On the other hand, the construction sector registered a monthly fall of 0.6% in its Business Confidence Indicator during this sixth month of the year.

In the commerce and manufacturing sectors, businessmen reduced their confidence in a more moderate way with a 0.3% decrease.

Although at the beginning of 2021 the business sector was optimistic about the post-pandemic economic reactivation, the pace of recovery has lost dynamism. The current figures show that since the beginning of 2022, the business sector has been following a trend of moderation in its expectations, with special care in the area of investments.

In the four sectors (manufacturing industry, construction, commerce and non-financial private services) the component that shows the lowest level of business confidence is that which evaluates the confidence that there is an adequate moment to make investments at least in the next 12 months.

This component was below the 50-point reference threshold in all business sectors.

Overall, businessmen remain subdued in the face of a significantly weaker economic recovery than projected. Inflation also represents one of the most important pressures on economic dynamism and, therefore, on business activity.

Source: El Economista