Mexico’s construction industry is changing gears in 2017. After recording GDP growth of 1.8% in 2016, the sector faces some short-term challenges. Austerity in public sector budgets has reduced the value of infrastructure projects. There are some macroeconomic concerns including the prospect of higher inflation and tighter interest rates. The worry is that demand for building work across the economy will slow down. Offsetting these concerns, however, are a number of positive signs in the medium-…
Construction & Real Estate
From The Report: Mexico 2017
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Mexico’s construction industry is changing gears in 2017. It is the fourth-largest value-added activity in the country and constitutes 8% of GDP. A young, growing population and a rising middle class continue to drive demand for homes, shops, factories and offices. The infrastructure industry is preparing for a future where private sector funding takes over from the public sector and becomes the key engine of growth. Furthermore, profits at Cemex, Mexico’s multinational cement company, have reached record levels, and the project to build Mexico City’s new airport – which is now under way – is the biggest of its kind in Latin America. Furthermore, Mexico’s real estate sector is preparing for a period of moderately increased uncertainty over interest rates, inflation and trade. Despite some apprehension, sales continue and medium-term market fundamentals remain positive. There were 10 real estate investment trusts trading on the Mexican stock exchange in 2016, with a combined capitalisation of some $13.3bn. Some property specialists say worries over inflation and a weaker peso may actually create new investment opportunities, and underline the value of property as a secure, long-term holding. This chapter contains an interview with Jerónimo Gerard Rivero, CEO and Founder, Mexican Retail Properties.