Growth figures for the construction industry represent “very bad news,” Bank of México deputy governor Jonathan Heath said Tuesday.
The sector grew by 1.2% in April in annual terms, but contracted 1.8% on the previous month, data from the national statistics agency Inegi had shown earlier in the day.
Construction should be showing double-digit growth, according to Heath. “In principle, most of the indicators should show high annual rates, in the two digits, as of April given the arithmetic effects of the comparative base,” he wrote on Twitter.
A rebound may not be forthcoming: economic analyst at Banco Base, Gabriela Siller, said that future growth in construction is uncertain due to a possible rebound in Covid cases, lack of public and private investment and increased material costs.
The year-on-year growth in April was the first increase after 33 months of consecutive drops. However, that incremental rise is potentially deceiving: it is largely due to the collapse in the sector’s activity last year, meaning April 2020 was far less productive than the preceding month.
The construction data contrasts with recent figures that paint a picture of an economic recovery gathering pace after gross domestic product fell by some 8.5% last year, the most since the Great Depression of the 1930s.
In fact, the president forecast on Friday that by the third quarter the economy would reach pre-pandemic levels.
Mexico’s economy grew 24.8% in May compared with the same month last year, according to a preliminary estimate published by Inegi.