Friday, June 21, 2024

Construction sector at highest production value since 2019

In May, the Mexican construction industry registered its highest production value since 2019, according to a survey conducted by the national statistics agency (INEGI).

According to the National Survey of Construction Companies (ENEC), the production value registered a monthly increase of 7.8% and an annual growth of 18.2%, making for three consecutive months of growth.

According to another recent INEGI poll, 60% of Mexicans who found formal work in 2022 did so in the services sector, which includes construction jobs. (Depositphotos/Photo by Kasto)

Month-on-month, employment grew by 1.1%, worked hours by 0.4%, and average wages by 1.6%. Compared to 2022, employment grew by 1.8%, worked hours by 7.3%, and average wages by 3.6%.

The survey also showed that the civil engineering subsector registered the highest performance, surpassing the building subsector by 2.5%. This result is linked to the construction of President López Obrador’s flagship infrastructure projects like the Maya Train.

Nearshoring is also thought to have boosted the construction sector’s growth as the relocation of multinational manufacturing companies has brought increased industrial construction in the central and northern regions of the country.

In an interview with the newspaper El Economista, analyst Ricardo Trejo said that May’s good results are likely due to both investment in the public and private construction industry, as well as INEGI’s updated survey methodology. 

This new methodology takes 2018 as the reference base year, has a test framework of 19,450 companies (integrated from the Mexican Business Statistical Registry), includes construction companies with a production value of over $73 million pesos per year (US $4.3 million) and over 250 workers.

After analyzing the INEGI’s report, Grupo Financiero BASE said that “at an annual rate, most of the construction sectors have shown growth, except the category of ‘other constructions,’ which fell 10.03% in May.” 

In an independent report published in May, Grupo Financiero BASE found that this subsector had recorded two months of deficit at an annual rate. Meanwhile, construction works related to water, irrigation and sanitation increased by 65.2%, registering 13 consecutive months of growth.

Works relating to transportation and urbanization grew by 62.1%, registering their second month of growth after 14 consecutive months of deficit, and projects related to electricity and telecommunications registered 10 months of growth, with a 59.94% increase over May of last year.

With reports from El Economista

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