The boost of the construction sector due to the Mexican industry17/10/2023
The Mexican construction industry has been growing in the last few years, with a 3.0% increase at the start of 2023, according to the National Institute of Statistics and Geography. The development of public infrastructure, the demand for new homes, and the need for more industrial activity spaces, are boosting this sector.
Public infrastructure development includes projects such as the Mayan Train in the south of the country or, recently, the new airport outside Mexico City and the ways for creating new access routes to the place, which is also expected to benefit the industrial park in the State of Mexico.
According to Trading Economics data, construction output in Mexico increased 25.65% in July of 2023, compared with the same month in the previous year, which demonstrates a growth in the activity. Trading economics uses data from the National Institute of Statistics and Geography.
Mexican construction industry in numbers
The Mexican construction sector is among the most essential activities for the country’s economy, and it’s the biggest one in Latin America regarding market value.
In 2021, the construction sector contributed to approximately 6.8% of Mexico’s Gross Domestic Product (GDP) and with 6 million workplaces, according to the National Institute of Statistics and Geography.
The construction sector is one of the most crucial cargo generators for transport activities in the country, and although it has a negative impact due to different factors such as the increase in material and workforce costs, the need for improving public infrastructure, and developing spaces for industrial activities and home buildings boosted the recovery since the Covid-19 pandemic caused a significant fall in the economy.
Growth: a common sign in different activities
The nearshoring trend and the growth of industrial activities in some areas of Mexico can explain the increase in the Mexican economy registered in the last years, as it’s a good reason for investing in improving infrastructure and bringing conditions for foreign enterprises to support the country.
In the first quarter of 2023, as an example, industrial production in Mexico grew by 2.5% year-on-year, driven in particular by energy generation and distribution, the National Institute of Statistics and Geography reported.
The energy activity was followed by increases in manufacturing industries (2.7%), construction (2.1%), and mining (1.7%), which demonstrates a growing trend in different sectors.
Industrial production rose by 1.6% in March alone compared to the same month in 2022.
The figures reflect the performance of Mexico's economy, whose gross domestic product (GDP) grew by 3.9% year-on-year and by 1.1% quarter-on-quarter in the first quarter of 2023, according to the statistics institute's timely estimate.
Mexico is one of the Latin American countries that took the longest to recover its GDP after the Covid-19 pandemic, which caused a historic contraction of 8.2% in 2020. Still, the most recent data for different activities shows recovery is in progress, and the construction sector demonstrates good signs.
In the growth landscape for industrial activities, Frontier Industrial offers industrial land for sale and industrial buildings for rent in some of Mexico’s most important industrial regions, such as the industrial park in the State of Mexico.
If your company is looking to relocate activities in the country due to the nearshoring trend or to target the United States market, please get in touch with us to check availability and receive more information.