Mon Sep 16 15:17:00 UTC 2024: ## Mexico’s Construction Boom Stalls Amidst Economic Headwinds

**Mexico City, September 16, 2024** – After a robust growth of 15.6% in 2023, Mexico’s construction industry is projected to experience a slowdown in 2024, according to a new report by ResearchAndMarkets.com.

The report attributes the slowdown to a combination of factors:

* **High base effects and inflation:** The strong growth in 2023 has created a high base effect, making it difficult to sustain similar growth rates in 2024. Coupled with high inflation, this is dampening construction confidence.
* **US bans on LNG exports:** The US’s ban on new LNG export terminals in January 2024 has significantly impacted Mexico’s oil and gas production, leading to cancellations of several projects, including the MXN34.8 billion Vista Pacifico Liquified Natural Gas Plant. This has had a ripple effect on the construction sector, as oil and gas projects are a significant source of investment.
* **Nationwide drought:** The drought is pushing up energy prices and hindering manufacturing activity, further affecting construction.

Despite these challenges, the report forecasts a rebound in the construction industry, with an average annual growth of 2.3% between 2026 and 2028. This growth is expected to be fueled by investments in energy, infrastructure, and industrial projects.

**Key projects driving future growth include:**

* **Woodside’s oil project:** The Australian oil company’s project near the southern maritime border is expected to generate MXN125.1 billion in investment and include the construction of a floating oil production plant by 2028.
* **BMW battery assembly plant:** The construction of a 80,000m2 plant in San Luis Potosi, representing an investment of MXN13.9 billion, is underway and expected to be completed by 2027.
* **Gerdau steel plant:** The Brazilian steel developer is planning a new plant in central Mexico with an estimated investment of MXN10.4 billion, with construction set to begin in 2025.

The report highlights the resilience of the Mexican construction sector, emphasizing that while current challenges are significant, future growth is likely to be driven by strategic investments in key sectors.

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