Overview of the Construction Industry’s Performance
The Mexican construction industry experienced a setback in April, with the production value of building companies falling by 0.1% compared to the previous month, according to data from Mexico’s National Institute of Statistics and Geography (Inegi). This decline ended the eight-month streak of consecutive monthly drops and failed to maintain the growth reported in March (0.6%).
Annual Comparison
On an annual basis, the production value dropped by 14.4%.
Government and CMIC Enthusiasm vs. Reality
Despite the optimism from the federal government and the Mexican Construction Chamber (CMIC) regarding a gradual sector recovery following March’s increase, the lack of public investment, particularly in road construction, became evident once again in the National Survey of Construction Companies (ENEC) results.
Transportation and Urbanization vs. Private Sector Construction
The transportation and urbanization subsector, primarily consisting of road, highway, bridge, and railway projects funded by public resources, only grew by 0.5% in April (up from 4.7% in March). This slow growth pulled down the overall production value.
Meanwhile, private sector construction projects such as residential buildings, industrial facilities, commercial and service buildings, and schools saw a 1.7% monthly increase. However, this growth was not enough to offset the decline in overall production value, as these projects had reported a 0.8% decrease in March.
Other Construction Subsector Performance
According to the ENEC, other construction subsectors also experienced a decline in April, with a -1.8% drop compared to March’s 3.6% increase.
Labor Market Developments
In terms of employment, the total number of employees in construction companies increased by 0.3% in April compared to the previous month. Breaking down employment types:
- Company-dependent employees: grew by 0.5%
- Manual workers: decreased by 0.1%
- Administrative, accounting, and management staff: increased by 2.7%
- Others (including family members and non-remunerated workers): decreased by 0.3%
Annual Labor Market Trends
On an annual basis, the total number of employees decreased by 8.6%. Additionally, hours worked dropped by 0.7% monthly and 11.8% annually, while real average wages showed mixed performance with a 0.2% increase and a 1.4% decrease.
Key Questions and Answers
- What caused the decline in construction production value? The lack of public investment, particularly in road construction, led to the decline.
- Which subsector performed better in April? Private sector construction projects, such as residential and commercial buildings, saw a 1.7% monthly increase.
- How did the labor market fare in April? The total number of employees increased by 0.3% in April, with company-dependent employees growing by 0.5% and administrative staff increasing by 2.7%. However, annual trends showed a 8.6% decrease in total employees.
