Stalled

Housing construction in Mexico doesn't seem to recover. What's going on?

If you take a quick look at Mexico’s construction GDP figures, you’ll notice that overall construction output in the country is now 9% higher than 2023 figures (as of 2Q24) and hovering at all-time highs.¹

However, not all is great for most construction companies in the country. According to INEGI data, most of this growth has been driven by a significant increase in heavy and civil engineering construction projects — a sector that has seen production rise at a CAGR of 12% during the past five years. Residential, commercial and industrial development GDP, on the other hand, recorded a negative CAGR during the same timeframe, bringing the sector’s share on overall construction output to all-time lows.

Despite the overall negative CAGR for the standard construction sub-industry; the country’s official economic data suggests a major slowdown on housing developments. When compared to the first semester of 2019, and based on non-inflation adjusted figures, housing development has remained flat; whereas industrial & commercial construction projects have risen by more than 34% as of June 2024.

Not only this, but we are seeing housing production (in number of housing units) at all-time lows; particularly in low and medium income housing projects.

For the more than 6,000 companies that focus on housing construction projects, the data seems to paint a bleak picture. Let’s break it down.