It was a lackluster week for Mexican economy and the infrastructure industry as the peso and rates took a hit with elections just around the corner. On top of that, Trump’s announcements on NAFTA and tariffs on steel and aluminum came as a blow to the industry. Candidates continue to give their opinions on the country’s most important projects, the Mexico-Toluca Interurban Train and NAIM as the race heats up. Real estate has driven the construction industry in the last years, but if the country wants to boost its competitivity and overall economic growth, it needs to invest more in infrastructure. In case you missed it, check out Maximiliano Zurita, DG of CAF Mexico’s interview of the week here.
Ready to restore Mexico’s economy through infrastructure? Here is your weekly roundup:
The Cloud Over Mexico’s Economy
The Mexican economy grew 1.1 percent in the 1Q18 due to the cloud of uncertainty hovering over the elections. Analysts were expecting at least 1.3 percent growth.
According to the IMD’s World Competitivity Index, Mexico has not advanced in the last 18 years. It currently ranks number 51 in competitivity in comparison to 48 in 2017.
More bad news for Mexico as it is the emerging country with the lowest investment, representing only 23 percent of GDP according to WB.
With only 23 days until elections, here is the latest from the candidates:
Sheinbaum wants to modify the Mexico-Toluca Interurban train if she wins in CDMX. She plans on changing the route of the train so that it does not only pass through the richest parts of the area. In the mean time PAN has asked SCT to make the construction more transparent.
AMLO looks to “Mexicanize” the construction industry, boost the development of local talent and create a specialized committee to increase transparency in SCT tenders.
AMLO has done an about-turn on NAIM and has told the CCE that he backs the viability of the airport.
PS: GACM is open for proposals for the Airfield Ground Lighting systems. So far only three offers have been made by three consortiums lead by: Elector Mexico, ADB Safegate and Asociación para Analisis de Riesgo e Integridad.
Raising the Roof
Inflation rates in housing rose 52 percent in the last six years which is good news according to Banxico as it is the sector reporting the most stability in terms of the country’s inflation goals.
The demand for mortgage loans in 1Q18 also dropped 22.9 percent due to more competition within the sector and a rise in rates. In terms of what municipality is selling more new homes, Benito Juarez in Quintana Roo takes the top spot for 1Q18 and Leon, Guanajuato comes in second.
Real Estate Racing the Clock
Fibra Upsite, Fibra Storage, Fibra Educa and Fibra Estructura are expected to debut on the BMV in June before elections. There may be some uncertainty for Mexican issuers ahead.
As LEED certifications grow more popular throughout Mexico, are these certifications tough enough for the climate-change era?