The enthusiasm with which the construction industry started in 2022 has vanished and a first quarter is already showing negative signs.
The high inflation and low public and private investment, mainly, caused the production value of construction companies to register a 3% drop in February compared to the previous month (a monthly increase of 3.3% was registered in January), according to Seasonally adjusted figures from the National Institute of Statistics and Geography (Inegi). In annual comparison, the increase was 5.1 percent.
But if the contrast is made with respect to the value of the work in February 2020, two months before the work of non-essential economic activities (including the construction sector) was suspended to stop the advance of Covid-19, the fall is 11.6% and if the comparison is with respect to February 2019, the decline is 22.9 percent.
According to the National Survey of Construction Companies (ENEC), employed personnel grew 1.8% in February compared to January, hours worked 0.6% and real average wages fell 0.5%, while in the comparison with the same month of 2021 presented increases of 6.4, 6.5 and 2.3 percent.
At the beginning of the year, it seemed that construction was coming out of the bad moment that it had been dragging since before 2020. The pandemic seems to be giving up, but the hard data does not reflect a good scenario. A 2022 is in sight with obstacles in variables such as investment and inflation. In our analysis we already consider that there will be a contraction in the sector’s GDP in the first quarter,” said the director of the FORECASTIM consulting firm, Ricardo Trejo.
In February, the housing subsector (totally related to the private sector in housing works, shopping centers, industrial parks…) presented a fourth consecutive month of growth (now 2.4%) and has a 44.4% share in the total types of works.
For its part, the category of transportation and urbanization (in charge of the public sector and with a participation of 24.6%) fell 6.3%, after an increase of 7% in January. The works related to other constructions (12.8% of the total) fell 9.9% and the previous month had an increase of 10.1 percent.
Meanwhile, the water, irrigation and sanitation subsector (with a 3.1% share in all works) fell 17.8% in the second month (in January it grew 19.3%, compared to the previous month).
Self-construction, depleted
According to the representative of FORECASTIM, inflation, especially in steel, cement or transportation, is reflecting negatively on all types of works, but with an emphasis on self-construction.
“The data reported is from a survey and the sampling is good, but it is done with companies in the formal sector. The largest companies will always have work (public or private), but we must not lose sight of the fact that the vast majority in construction are SMEs and they are the ones that are suffering the most at the moment,” added Trejo.
