Overview of Recent Economic Performance
In line with the recent estimation of Mexico’s Gross Domestic Product (GDP) for the third quarter of 2025, released on October 30th, the secondary sector of Mexico’s economy continued to show weakness in September, hampered by poor performance in the construction industry.
Industrial Activity Declines
According to the National Institute of Statistics and Geography (Inegi), Mexico’s industrial activity dropped 0.4% on a monthly basis and 3.3% in annual terms during September. This marks the fourth consecutive monthly decline and the ninth in the last twelve months, as well as the seventh consecutive annual decline and the largest since January, excluding a marginal increase in February (+0.1%). The downward trend has been consistent since April 2024.
Construction Sector’s Impact
The September contraction is primarily attributed to the construction sector, which nearly mirrored its August decline with a 2.5% drop (2.4% in August), as shown by the Indicador Mensual de la Actividad Industrial (IMAI) data.
After four consecutive monthly setbacks (eight in the last twelve months), construction reached its lowest level since April 2023, just before the previous federal government accelerated iconic projects like the Tren Maya or the Corredor Interoceánico del Istmo de Tehuantepec.
Component Breakdown
Within construction, both building (-3.2%) and civil engineering (-3.0%) components continued to decline. Building is capital-intensive, while civil engineering relies on public investment.
After two years of robust growth, the construction sector is currently facing challenges due to reduced public infrastructure spending following the completion of prominent projects from the previous six-year term. Additionally, external and domestic uncertainty persists due to changes in U.S. trade policy and the implementation of various legal reforms, including judicial, energy, regulatory changes, whose business climate impact remains to be seen.
Positive Sectors
On a positive note, mining, public utilities, and manufacturing—the backbone of industrial activity—experienced monthly improvements of 0.7%, 0.4%, and 0.2%, respectively.
Manufacturing Sector’s Performance
Although manufacturing had a marginal decline, its annual drop deepened from 1.7% to 2.3% between August and September, marking the fourth consecutive monthly decline.
Out of 21 manufacturing sub-sectors, 12 showed monthly retreats, while 17 exhibited annual contractions when considering inter-annual comparisons.
Cumulative Decline
From January to September, Mexico’s industrial activity has shown a 1.8% decline, contrasting with the slight 0.2% advance during the same period in 2024.
Excluding the atypical 11.4% plunge in the pandemic year of 2020, this 2025 performance represents the largest decline since 2009, when the global economy experienced a significant recession, with a 9.8% contraction by September.
Confirmation of GDP Estimation
September’s IMAI data also confirms the Inegi’s timely GDP estimation, which reported a 0.3% quarterly decline in the GDP, largely due to the weakness in Mexico’s secondary economic sector.
According to the estimation, secondary activities fell 1.5% in the second quarter. Using IMAI calculations, it is deduced that industrial activity experienced a similar decline by averaging July, August, and September results.
Key Questions and Answers
- What is the recent performance of Mexico’s industrial sector? The industrial activity in Mexico has shown a 0.4% monthly decline and a 3.3% annual decrease in September, continuing the downward trend observed for several months.
- Which sectors are contributing to this decline? The construction sector, which dropped 2.5% in September, is the main contributor to the overall weakness. Within construction, both building (-3.2%) and civil engineering (-3.0%) components have been declining.
- What are the positive sectors in Mexico’s industrial activity? Mining, public utilities, and manufacturing have shown monthly improvements. Manufacturing, despite a marginal decline, experienced a 0.2% increase in September.
- How does Mexico’s industrial performance compare to previous years? Excluding the pandemic-related decline in 2020, Mexico’s industrial activity is showing its largest contraction since 2009.
- How do the recent IMAI data and Inegi’s GDP estimation align? The September IMAI data confirms the Inegi’s timely GDP estimation, which reported a 0.3% quarterly decline in the GDP, largely due to the weakness in Mexico’s secondary economic sector.
