Construction advances in September, but ups and downs continue

2022 has been a year of ups and downs for the construction industry, where the expected recovery is not on the horizon. The National Institute of Statistics and Geography (Inegi) reported this Thursday that during September the production value of companies in the sector grew 1.2%, compared to the previous month, based on seasonally adjusted figures, and 0.4% compared to the same month. from last year.

Since last January, said indicator has shown a repeated pattern of rising one month and falling the next.

In September, despite the monthly increase referred to in the value of production, the building subsector (mainly industrial, commercial and housing buildings, in charge of the private sector and which has a participation of 39% in the total) registered a decrease of 0.8 %, compared to August, when it grew 0.7%, after four consecutive months of decline.

Regarding transportation and urbanization works (public works with a participation of 23.2% and which includes highways, roads, bridges, airports or railways), they grew 3.4% compared to August, thus ending a streak of consecutive months of declines . For their part, those related to oil and petrochemicals (with a share of 18.1%) added five consecutive months of growth.

In a recent sectoral report, the Mexican Chamber of the Construction Industry (CMIC), chaired by Francisco Solares, highlighted the bad moment it is going through.

“The production of construction companies has presented a considerable decrease, since 2008 (650,000 million pesos), registering 290,000 million pesos as of August 2022. The recovery in the production of construction companies is affected by the rise in prices of construction inputs, the repercussions on employed personnel due to the subcontracting reform and mainly due to the lack of public and private investment”, it was explained.

Low pace in hiring

Based on the National Survey of Construction Companies (ENEC), in September the total employed personnel increased 0.7%, compared to August and 4% compared to the same month of 2021, the hours worked 0.6 and 2.6% and average real wages 0.3 and 1.4% (although wages paid to workers fell 0.6 and 0.5%).

After the analysis of said scenario, the CMIC reported that by the end of the year it expects a reactivation of 0.8% (plus/minus one percentage point), considering that the levels of public and private investment will be dynamized in the final part, with the announcement of the third infrastructure package that will be presented until there is further analysis on the level of progress of the works contained in the first and second packages and the inflationary rise in the construction sector is controlled”.

alejandro.delarosa@eleconomista.mx