The consumption data published yesterday was one percentage point higher than the forecast from a few days ago. As previously pointed out, when employment growth falls below 1%, recession is a certainty. It is expected that in March the opposite will occur, confirming an annual consumption growth of 1% until that month.
Regarding investment, although the seasonal effect is less evident, it still exists. When comparing the average from January to April of this year with the same period last year, a decline is observed in all areas. In April, a 5% drop in automobile sales was recorded compared to the same month last year, suggesting no improvement in investment in upcoming reports. This pessimistic trend is confirmed by the opinions of entrepreneurs.
One in ten entrepreneurs shows pessimism this year, while in 2024 more than half were already pessimistic. The aggregated indicators from INEGI reveal that since October we have been below 100 units in the coincident indicator and since November in the leading one. Both show a decline compared to the previous month, suggesting that the bottom of the recession has not yet been reached.
IMSS data indicates a reduction in employment in April, which practically brings the growth in this indicator to zero. The total investment drop until February is 6%, with similar contractions in both the acquisition of machinery and equipment and in the construction sector.
"Business confidence" shows declines in the commerce and manufacturing sectors of four points, while construction drops 4.5 points and services 6 points. One of the key indicators is the "right time to invest", where a significant drop is evidenced, partially attributed to the weakness of public finances, indebtedness, and political uncertainty.
In summary, the current recessionary dynamic is not due to external factors, but to internal causes. The negative trend is reflected in various areas such as construction, manufacturing, commerce, and services, which have seen a decrease in business confidence and in the willingness to invest.
