Overview
The construction sector in Mexico experienced a 2.9% monthly and 19.1% annual decline in production value for August, according to the Instituto Nacional de Estadística y Geografía (Inegi). This downturn is primarily attributed to insufficient public investment in transportation and oil & petrochemical projects.
Sector Breakdown
The construction segment comprises two main categories: edification (approximately 50% of the total) and transportation & urbanization (20%). Edification, mainly consisting of industrial, commercial, service buildings, and housing projects, saw a 0.1% monthly decrease in August after a 3% decline in the previous month.
Transportation & urbanization projects, which include ferroviary, road, bridge, and pond construction works, experienced a 4.9% monthly drop in August following a 1.7% decrease the previous month. Despite this, there is optimism that the sector will recover by year’s end.
The oil & petrochemical segment, accounting for around 6% of the total construction activity and primarily involving refinery, oil & gas pipeline, and petrochemical plant construction, faced the most significant decline of 24.8% in August after a 13.6% growth in the preceding month.
Employment and Workforce
According to the Inegi’s Monthly Report on Construction Companies (ENEC), the total number of employees in construction firms decreased by 0.7% on a monthly basis and by 11.5% annually in August.
- Contract Types: Non-dependent personnel (contracted through another legal entity for fees or commissions) saw a 2.8% decrease, while company-dependent personnel dropped by 0.6%. The number of workers decreased by 0.8%, administrative and accounting staff remained unchanged, and other (proprietors, relatives, and additional workers without pay) increased by 1.3%.
- Work Hours: Work hours reduced by 1.1% monthly and 13.5% annually.
- Remuneration: Real average wages declined by 1.1% both monthly and annually.
Ongoing Projects
Despite the overall downturn, the construction sector remains hopeful due to the recent announcement of the first ruling in the public tender for a 30.3 km train segment connecting Querétaro’s industrial zone and Apaseo El Grande on August 18. This project signifies the beginning of passenger train construction, which could potentially stimulate sector growth.
