Overview of the Construction Sector’s Performance
The production value of construction companies, when compared monthly and with seasonally adjusted figures, turned negative in July, dropping by 1.3%. In June, it had grown by 0.9%, according to data from Mexico’s National Institute of Statistics and Geography (Inegi).
Monthly Comparison
The decline in July was primarily due to a 2.9% drop in construction projects related to the building segment, which are privately funded and mainly involve:
- Residential buildings
- Industrial, commercial, and service buildings
These projects account for approximately 50% of the total construction activities. In June, these projects had grown by 2.8%, suggesting an early sign of recovery.
Annual Comparison
The annual comparison showed a 17.7% decrease in production value, highlighting the ongoing challenges faced by the construction sector.
Segment-wise Performance
On the other hand, construction projects related to transportation and urban development (roads, highways, bridges, airports, or railway works) saw their second consecutive monthly increase of 0.1% in July.
However, according to the federal government’s current passenger train construction schedule, benefits will only start reflecting in the production value of construction companies by the last quarter. This is due to extended licitation processes resulting from various inquiries made by interested firms.
Employment Trends
The total number of employees in construction companies decreased by 0.7% in the past month, according to Inegi’s National Survey of Construction Companies (ENEC). Annually, the decline stands at 11.5%.
- Non-dependent personnel (hired and provided by another legal entity for fees or commissions without a fixed salary) decreased by 1.6%.
- Dependent personnel (employed directly by the company) decreased by 0.7%.
Hours worked dropped by 0.2% monthly and 13.7% annually, while real average wages increased by 0.5% monthly and 2.1% annually.
Key Questions and Answers
- What caused the decline in construction production value? The drop was primarily due to a 2.9% decrease in building-related projects, which are mainly privately funded and involve residential and commercial buildings.
- How are transportation and urban development projects performing? These projects have seen a 0.1% monthly increase for two consecutive months, indicating a positive trend.
- What is the current state of employment in the construction sector? The total number of employees in construction companies decreased by 0.7% monthly, with non-dependent personnel dropping by 1.6% and dependent personnel decreasing by 0.7%. Hours worked decreased annually by 13.7%, but real average wages increased by 2.1% annually.
