The Mexican construction sector it may grow a “marginal” 0.4% year-on-year in 2022, driven by the Government’s civil works, but stalled by insufficient private investment and inflation, according to a BBVA report.
The data would imply a slight advance after the annual increase in real terms of 7.2% in construction in 2021 and the drop of 17% in 2020, when the pandemic forced the suspension of construction for months, said Carlos Serrano, chief economist of BBVA Mexico.
“What we have seen is a rebound, but it is a rebound that, like the general economy, speaks of an incomplete recovery,” Serrano said when presenting the report.
The economist highlighted that civil works could have a better performance in 2022 than building, a phenomenon that had not been seen in more than 10 years.
The value of production in infrastructure grew more than 6% annually at the end of 2021, calculated the report.
But Serrano clarified that almost three quarters, 74%, of the federal budget allocated to public works is concentrated in four of the 32 territorial entities: Campeche, Tabasco, Mexico City and Veracruz.
Meanwhile, the northern states of the country are concentrating private construction due to the interest of foreign companies in building industrial buildings.
“The amount of public and private investment must be much higher for a faster recovery. Investment certainty is an essential requirement for this purpose”, he mentioned.
The importance of the construction sector lies in being the fourth economic activity that generates wealth in Mexico, where it contributes more than 7% of the Gross Domestic Product (GDP), according to the Mexican Chamber of the Construction Industry (CMIC).
In addition to the need for investment, “the incipient improvement in the sector will be affected by the strong increase in input prices,” Serrano warned.