Building/Construction

The Mexican construction market will average an annual growth of 4.5 % over the next two years.

Private, public and industrial growth

 There are many business opportunities for foreign companies within private, public as industrial sector. There is a growing need for new housing and renovation and the prices are icreasing as the urbanization continue. The demand for quality is also increasing.  Federal Infrastructure Development Plan foresees an investment of US$ 300 billion between 2007-2012 in several mega housing projects.In the Industrial sector ther are also a growing investments in renovation, as construction of roads, seaports, airports, highways, dams, etc. Recent increase of foreign direct investment has resulted in the expansion of industrial production.The public sector has experienced 10 years of strong investment and a positive economic growth, stable currency, lower interest rates, expanding banking system.

Mexicos ambitious infrastructure development plan

The Mexican construction industry employs 5.7 million persons, which is equivalent to 13 % of the total Mexican labor force.The Mexican Government has launched an ambitious infrastructure development plan (IDP) for the 2007-2012 period, worth 300 BUSD. Such program presumes the continuous expansion of the Mexican construction industry and sub industries.One of the strategies set forth by IDP is the implementation of Private and Public Partnership (PPP) initiatives‘, which present an outstanding investing opportunity for Norwegian companies.

In 2005, the Gross Domestic Product of the Construction industry stood at 399,202.5  million pesos, which amounts to a growth of 5.06% compared to the same period of the previous year. In terms of economic subgroups, manufacturing output in the basic metals industry during the year 2005 fell 5.2%. However, in the first half of 2006, it grew 18.4% compared to the same period of the previous year.

Production of non-metal minerals, for its part, grew in 2005, in this case by 4.9%, although it also increased by almost 11.2% during the first six months of 2006 compared to the first half of 2005. According to the National Construction Industry Chamber, the value of building works from October 2005 to October 2006 grew in 23.6%,from 14,168.2 to 17,509.2 million pesos.

Foreign Trade

In the year 2005, the Construction and Ironmongery Materials Sector generated exports (including in-bond) with a value of 6,980.6 million USD, which amounted to a decline of 26% compared to the previous year, while in the period from January to October of 2006, these exports totaled 6,853.6 million USD.

The main items exported by this sector were keys, valves and metal parts; manufactured iron and steel; and handtools. As far as the destinations of exports are concerned, figures for 2005 reveal that 83.6% of sector products were sold to the United States and 7.7% were exported to Latin America.Sector imports during 2005 stood at 9,186 million USD (including in-bond), which represents an increase of 14% on the corresponding figures for the year 2004. In the period from January to October  2006, the value of imports came to 8,921 million USD.

During 2005, the main imported products were iron and steel screws, valves and valves parts, nuts and bolts with a value of 1,887.4 million USD, handtools worth 276 million USD, and copper pipes with 345.8 millon USD, giving a total value of 9,186 million USD. As far as the origin of imports is concerned, figures for 2005 show that 63% come from the United States, 6% from China and 4% from Japan.The trade deficit for the year 2005 stood at 2,205 million USD, while the corresponding figure for the period between January to October 2006, was 2,077.4 million USD.

PERSONS IN CHARGE OF THE SECTOR

 Sources: Bancomext and Swedish Trade Council.

http://www.investinmexico.com.mx/pied/cds/pied_bancomext/industrial_sector/construction_filename.htm