Construction Down: Inegi

The construction industry has become one of the most backward sectors of the economy accumulating three consecutive months of declines in the value of its production, a result of the crisis faced by homebuilders, as well as the virtual freeze government spending for public so far this year work, commented specialists.

The production value of construction companies during last July decreased 4.1% annual rate in real terms, the National Institute of Statistics and Geography (INEGI) reported. In May and June the construction industry had recorded declines of 1.4 and 3.4% respectively, which in July recorded three consecutive months downward.

The agency explained that this was a result of declines in construction subsectors 7.0%; specialized work for construction 2%, and the construction of civil engineering works 1.5%.

By type of work, the value of production declined in those related to transport; building, and water, irrigation and sanitation; in contrast, it increased relative to oil and petrochemicals; “Other”, and electricity and communications.

Based on seasonally adjusted figures, the production value generated by the construction companies was lower at 0.85% during the seventh month of 2013 compared to the immediately previous month, the employed persons fell 1.02% and hours worked 1.30% in the same period.

The share of the work contracted by the public sector accounted for 51% of the total, 0.7 percentage higher proportion than the same month a year earlier points, and for the private sector was 49%.

Personnel employed in construction companies reported a reduction of 4.8%, while hours worked rose 0.4% in the reported month compared to July 2012.

The value of the work built by construction companies focused on construction of civil engineering at 46.9%, 44.9% Building and construction expertise to 8.2% Works.

Fall by work

By type of construction, the building in general (such as housing, schools, buildings for industry, trade and services, hospitals and clinics, and buildings for recreation and leisure) contributed 43.2% of the total value during the reported month, and Transportation (such as roads, highways, roads, railways, metro and light rail, and development works and roads, among others) showed a 23.7% stake. Thus, these two types of work jointly accounted for 66.9% of the total value.

The rest of this value corresponded to works related to oil and petrochemicals, other constructions, likewise electricity and communications and the Water, irrigation and sanitation.

Depending on the location of the work, the main contributions to the total value of the work built by state corresponded during July this year to Veracruz with 8.9%, Campeche 8%,Estado of Mexico 7.4%, Nuevo León 7.1%, Jalisco 6.8% Distrito Federal 6.6%, 6.1% Guanajuato, Baja California and Tabasco 4.2% each, Sonora 3.9%, 3.7% Chihuahua, San Luis Potosi and Queretaro 3.6% 3.3 percent. Together these thirteen entities contributed 73.8% of the value produced.

In the first seven months of this year, the production value of construction enterprises decreased 1.9% in real terms compared with the same period of 2012, the personnel employed 2.2% and real average earnings fell declined 0.2%, while hours worked increased 1.6%. Meanwhile, the value of the work built by the public sector accounted for 49.1% of the total.

Industry experts expect in the remainder of 2013 and early next, the release government spending on public works which will help slow the decline of the construction industry and boost the country’s economic recovery.

Source: El Universal