Businessmen’s distrust after the elections: Inegi

Pessimism about the future economic situation of the country and companies undermined business confidence after the June elections, the National Institute of Statistics and Geography (INEGI) said.

The Global Business Opinion Confidence Indicator (GBI) reached 53.1 points in June, its lowest level since February 2023, representing monthly and annual declines of 1.6 and 1.8 points, respectively.

The results show signs of caution on the part of the Mexican business consensus after the elections, as well as uncertainty about the possible impacts of the constitutional reforms.said Janneth Quiroz, director of economic, exchange and stock market analysis at Monex.

The IGOEC ended last December at 56.2 points, one of the highest levels of the indicator, but subsequently slowed down. In January of this year it was at 56 points; in February the reading was 55 points, in March it was 54.8 points. The readings for April and May were 55 and 54.7 points, in that order.

Business confidence measures the humor of entrepreneurs, a variable that is related to short- and medium-term production and investment decisions. In June, declines were reported in the four main sectors it compiles: manufacturing, construction, trade and non-financial services.

Three of the four sectors (construction, manufacturing and services) fell in performance compared to May. In contrast, trade remained unchanged at 53.5 units.

The business confidence indicator (ICE) for manufacturing industries was 53 points, 0.7 less than last May. With this figure, the indicator is, for 37 consecutive months, above the threshold of 50 points (optimism levels); compared to June 2023, it fell 0.3 points.

The construction ICE stood at 50 points, falling 0.6 points monthly and 2.4 points annually in June; trade (53.5 points) reported no monthly growth and fell three points annually. Non-financial services remained at 53.4 points, but business confidence in the sector fell 2.8 points in June compared to last May and 1.9 points compared to June 2023.

Overall, economic growth appears to be slowing down, so business leaders remain cautious and prudent in view of the following announcements that may impact economic activity.Quiroz said.