UPDATE 2-Mexico consumer confidence dips 1st time this year

* Seasonally-adjusted confidence at 92.7, lags forecasts

* Confidence marks first decline since December last year

* Weak domestic demand seen keeping rates on hold
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By Patrick Rucker

MEXICO CITY, April 5 (Reuters) – Consumer confidence in
Mexico fell for the first time this year as Mexicans, despite
being more hopeful about the economy, said they were more wary
about splurging on big-ticket items such as furniture and
washing machines.

The seasonally adjusted index of consumer confidence
(MXCONF=ECI: Quote, Profile, Research) in March fell to 92.7 from 93.1 in February, the
national statistics agency INEGI said on Tuesday.

It was the first decline in the seasonally adjusted measure
since December and fell short of the 93.7 expected by
economists in a Reuters poll. The February figure was revised
from an originally-reported 93.2.

While consumers said their own family situation was better
now than it had been a year ago and expected the economy to
strengthen over the next 12 months, the data showed they were
less inclined to make a big-ticket purchase such as furniture,
washing machines, televisions and other appliances.

Most analysts do not expect Mexico’s central bank to raise
borrowing costs before early 2012 and weak domestic demand
could be one factor leading policymakers to keep rates at their
relatively-low levels for some time.

The non-seasonally adjusted consumer confidence
(MXCONC=ECI: Quote, Profile, Research) index fell to 91.7, the statistics agency said,
marking the first decline since November. Analysts in a Reuters
poll had forecast a slight uptick to 92.4.

TRICKLE SOUTH

The Mexican economy expanded by 5.5 percent last year, the
fastest in a decade, as it bounces back from a deep recession.
Analysts expect the economy to grow by 4.25 percent this year,
according to the last central bank poll.

Data last week showed Mexico’s economic activity in
January beat analysts’ expectation [ID:nN28114561].

Last Friday’s solid U.S. jobs data could further spur local
factories in the months ahead. Since roughly 80 percent of
local exports are absorbed by the United States, a brightening
economic outlook north of the border typically lifts Mexico.

Consumer confidence has recovered from a low in 2009 when
the adjusted index touched 78 points in May and the raw index
was at 77 points in October.

In seasonally adjusted terms, it was last higher than 100
points in March 2008, when it registered 100.9.
For the INEGI statement on consumer confidence data, please
see”
,
http://www.inegi.org.mx/inegi/contenidos/espanol/prensa/comunicados/indcon.asp
( Editing by W Simon )

UPDATE 2-Mexico consumer confidence dips 1st time this year