A growth of just over 1% for the construction sector in Mexico is “very bad news,” declared on Tuesday Jonathan Heath, deputy governor of the Bank of Mexico, who also suggested that it should have expanded more, as the economy it is recovering from a deep recession fueled by the pandemic.
The production value of construction companies grew 1.2% in April 2021 compared to the same month last year and contracted 1.8% compared to March, according to INEGI data.
The annual growth in April was the first increase after 33 months of consecutive falls, although this growth is due to the effect of the low base of comparison, according to Banco Base.
“In principle, most indicators should show high annual rates (double digits) as of April given the arithmetic effects of the comparison base,” wrote Jonathan Heath on his Twitter account.
The construction data contrasts with recent figures that painted a picture of an economic recovery that accelerated after Gross Domestic Product (GDP) fell 8.5% last year, its biggest setback since the Great Depression of the 1990s. 1930.
Gabriela Siller, director of economic-financial analysis at Banco Base, highlighted that the construction sector faces an adverse outlook due to a possible rebound in Covid cases, a lack of public investment, increased material costs and a lack of private investment in the face of uncertainty in the country.
President Andrés Manuel López Obrador predicted last Friday that by the third quarter the economy would reach pre-pandemic levels.
Mexican GDP grew 24.8% in May compared to the same month last year, preliminary figures from INEGI showed on Thursday.
With information from Reuters
