Overview of the Construction Sector’s Performance in April
Mexico’s construction industry experienced a downturn in April, with the value of production from construction companies decreasing by 0.1% compared to the previous month, according to data released by the National Institute of Statistics and Geography (Inegi).
Annual Comparison and Key Factors
The annual comparison shows a 14.4% decline in the construction sector’s value of production. The slump is influenced by a 13.4% drop in the oil and petrochemical activities, coinciding with a crisis of payments to suppliers. This decline is also attributed to the lack of public investment, primarily in road construction, and Pemex’s low production this year, which has resulted in unpaid debts of approximately 3 billion pesos to construction companies.
Impact on Subsectors
Transportation and Urbanization:
The subsector of transportation and urbanization, which includes roads, highways, railway works, and urban transportation projects, grew by only 0.5% in April (up 4.7% in March). This subsector’s growth pulled the total production value downward, accounting for 6.1% and 20% of the overall construction production.
Private Sector Construction:
Construction projects related to building (residential, industrial, commercial, and service buildings) handled by the private sector increased by 1.7% in April after a 0.8% decrease in March. Despite this growth, these projects could not positively impact the overall result due to their relatively smaller contribution (50.3%) compared to public sector projects.
Public Sector Construction:
The subsegment of other public construction projects also experienced a decline of 1.8% in April (up 3.6% in March). This subsector’s contribution to the total construction production was 15% in April and is expected to be 12.3% in the same month next year.
Labor Market Trends
In terms of employment, the total number of employees in construction companies increased by 0.3% in April compared to the previous month, according to the National Survey of Construction Companies (ENEC).
Key Questions and Answers
- What is the main issue affecting Mexico’s construction sector in April? The primary concern is the 0.1% decrease in the value of production from construction companies, influenced by a 13.4% drop in oil and petrochemical activities and insufficient public investment, particularly in road construction.
- Which subsectors were most affected by the downturn? The transportation and urbanization subsector, which includes roads, highways, railway works, and urban transportation projects, experienced a minimal 0.5% growth in April, pulling the overall production value downward.
- How did private and public sector construction projects perform? Private sector construction projects grew by 1.7% in April, but their contribution to the overall production is relatively smaller (50.3%) compared to public sector projects.
- What is the current state of employment in the construction sector? The total number of employees in construction companies increased by 0.3% in April compared to the previous month, according to ENEC.
