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Infrastructure spending is down, to the chagrin of the construction industry. Infrastructure spending is down, to the chagrin of builders.

Despair in the construction industry as activity down 9% in July

It was the biggest drop in 18 years, builders say

Activity in the construction sector declined 9.1% in July, the biggest drop since June of 2001.

The decline followed six consecutive months of economic downturns in the building sector, which the president of the Mexican Chamber of the Construction Industry (CMIC) blamed on low levels of public investment this year.

Eduardo Ramírez told the newspaper El Economista that the situation is causing “great despair” among builders and construction companies.

To the end of July, just 24% of resources allocated to public works projects had been spent, the CMIC said this week, and a 6% cut to infrastructure spending was proposed in the government’s 2020 budget.

Ramírez said that there is a risk that some construction companies will be forced to shut down, adding that the CMIC is seeking to meet with President López Obrador to discuss the situation.

“There is already great despair in the sector because, despite the importance that construction represents, [the government] hasn’t given it a place. We’re not going to confront anyone but we are seeking the opportunity to tell President Andrés Manuel López Obrador directly that we are his allies to revive the economy. We’re confident that he will receive us soon,” he said.

Ramírez said that the CMIC has already met with other government officials – including presidential chief of staff Alfonso Romo – who agreed that greater public investment is needed to stimulate the construction sector.

However, their support for higher infrastructure spending has not yet translated into concrete benefits for the sector, he added.

“We’ve insisted on having a meeting with the president to set out the situation that the sector is going through. We want him to see . . . the important asset he has in Mexican builders to achieve his regional development and job creation goals,” Ramírez said.

One government infrastructure project that will provide ample opportunities for the construction sector is the Santa Lucía airport. However, the project is currently delayed by legal action against it.

López Obrador reiterated this week that opposition to the airport is politically motivated, adding that he expected the injunctions granted against it to be overturned soon because they have no legal basis.

“. . . There has been a delay because of these injunctions but we’re doing everything in accordance with the legal framework [to defeat them],” he said.

Another major government infrastructure project, the Maya Train, is not currently facing any legal action that could delay its construction, the president said.

“Touch wood, they’re not going to file injunctions [against it too] . . .”

Source: El Economista (sp) 

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