Confidence Keeps Sinking Among Mexico’s Business Leaders

Confidence among Mexican businesses keeps sinking.

Mexico’s business leaders saw a further decline in their confidence in August, according to the most recent survey results released by the country’s National Institute for Statistics and Geography (INEGI).

INEGI’s August survey revealed a 1.4 point decline in confidence for the services sector and a 0.3 point drop for trade compared to the previous month.

Manufacturing confidence saw a slight monthly increase of 0.2 points to 53.2, but it still posted a yearly decline of 0.5 points. The construction sector experienced a modest rise in confidence, reaching 51.1 points, though it also declined year-on-year.

Trade and non-financial services faced significant drops in confidence, with non-financial services falling by 5.5 points annually.

The Global Business Opinion Confidence Indicator (IGOEC), which consolidates data from manufacturing, construction, trade, and non-financial private services, registered 52.8 points in August.

This marks a decline from the 53.4 points recorded in July and represents an annual decrease of 3.6 points. The IGOEC index has remained subdued since early 2023.

Despite these decreases, all sectors remained above the 50-point threshold; they remain in “positive” territory.

The prevailing pessimism among business leaders is partly attributed to uncertainty surrounding the federal government’s latest package of reforms. Known as “Plan C”, some of these reforms seek to make changes at a constitutional level.

Business folks and investors have been particularly worried about a bill that would overhaul Mexico’s judicial branch. The proposed reform has led to judges, magisters and thousands of judicial workers to take the streets in protest. They’ve been joined by law students, professors and a other members of civil society.

The proposal has already been aprooved by Mexico’s federal Congress and is expected to sail smoothly in the Senate.

There are also concerns around the upcoming presidential elections in the US. Investors have expressed their fears of a major shift in tUS’ trade policy, especially if Donald Trump were to return to the White House.