Construction in Mexico – Key Trends and Opportunities to 2025 (Q3 2021)
Summary
Following a decline of 17.4% in 2020, Mexico’s construction industry is now expected to rise in real terms by 8.1% in 2021, compared to the previous forecast of 9.8%. Over the remainder of the forecast period (2022-2025), growth is expected to moderate to an annual average of 2.6%. The downward revision to this year’s growth forecast can be explained by lower-than-expected activity in the infrastructure segment in Q2, as limited spending on public works and the lack of a significant relief package to offset the effects from the COVID-19 crisis for both households and businesses continue to hold back private investment in the sector.
The Monthly Indicator of Industrial Activity (IMAI) from the National Institute of Statistics and Geography (INEGI), which is closely linked to the GDP value-add construction data, showed that the construction industry rose by just 0.6% quarter on quarter (QoQ) in seasonally adjusted terms in Q2 2021, after posting growth of 3.3% in Q1 2021. The slight rise in activity in Q2 was driven by the specialized works segment, which rose by 3.6%, compared to an increase of 4.3% in Q1, while the residential and non-residential building segment posted no growth after increasing by 1.5% in the previous quarter. The infrastructure segment, by contrast, fell by 1.9% in Q2 after registering a Q-o-Q rise of 5% in Q1.
The strong growth in the specialized works segment can be attributed to the rising demand for home renovations and upgrades due to the pandemic and the significant shift to remote working. Meanwhile, the growing demand for new industrial spaces – owed to the robust economic recovery in the US, Mexico’s largest trading partner – is supporting growth for the residential and non-residential segments. However, risks arising from a third wave of the virus, which now appears underway, present a growing threat to the short-term outlook. It is likely that restrictions will be tightened in the next few months, as the majority of people in Mexico remain vulnerable to the virus, which would further weigh on activity and slow the recovery of hard-hit sectors such as retail, office, leisure and hospitality during the second half of the year.
GlobalData’s Construction in Mexico – Key Trends and Opportunities to 2025 (Q3 2021) report provides detailed market analysis, information, and insights into Mexico’s construction industry, including –
– Mexico’s construction industry’s growth prospects by market, project type and construction activity
– Critical insight into the impact of industry trends and issues, as well as an analysis of key risks and opportunities in Mexico’s construction industry
– Analysis of the mega-project pipeline, focusing on development stages and participants, in addition to listings of major projects in the pipeline.
Scope
This report provides a comprehensive analysis of the construction industry in Mexico. It provides –
– Historical (2016-2020) and forecast (2021-2025) valuations of the construction industry in Mexico, featuring details of key growth drivers.
– Segmentation by sector (commercial, industrial, infrastructure, energy and utilities, institutional and residential) and by sub-sector
– Analysis of the mega-project pipeline, including breakdowns by development stage across all sectors, and projected spending on projects in the existing pipeline.
– Listings of major projects, in addition to details of leading contractors and consultants
Reasons to Buy
– Identify and evaluate market opportunities using GlobalData’s standardized valuation and forecasting methodologies.
– Assess market growth potential at a micro-level with over 600 time-series data forecasts.
– Understand the latest industry and market trends.
– Formulate and validate strategy using GlobalData’s critical and actionable insight.
– Assess business risks, including cost, regulatory and competitive pressures.
– Evaluate competitive risk and success factors.