FDI in Mexico’s construction industry

Mexico captured 659.4 million dollars of Foreign Direct Investment (FDI) in the construction industry during the first half of 2023, according to data from the Ministry of Economy.

As part of that amount, 569.6 million dollars were invested in the construction of works for the supply of water, oil, gas, electric energy and telecommunications.

In turn, Mexico received 48.6 million dollars of FDI for facilities and equipment in construction.

During 2022, construction sector output increased 0.3% in real terms, compared to an increase of 8.3% in real terms during 2021.

The construction sector is subject to cyclical trends and is one of the most affected by changes in government and private sector spending.

As such, it has benefited greatly from the recent reconstruction, modernization and expansion of the federal highway network, as well as other infrastructure projects.

However, the construction sector has shown a negative trend with respect to housing and construction output since 2019.

During the first half of 2023, the production value of construction companies recorded, in original figures, an increase of 10.5%, compared to the same period of the previous year.

Construction Industry

The main sectors of the Mexican economy are manufacturing, oil and petrochemicals, tourism, agriculture, transportation and communications, construction, mining and electric power.

In 2022, the services sector accounted for 63.6% of GDP and 62.7% of the labor force, followed by the industrial sector, which accounted for 28.5% of GDP and 25.1% of the labor force, and the primary sector, which accounted for 3.4% of GDP and 11.5% of the labor force.

FDI inflows to Mexico in the construction industry went from US$917 million in 2019 to US$146 million in 2020, then partially recovered in 2021, totaling US$433 million, but dropped to US$390 million in 2022.

The all-time high was in 2017, at $3,361 million.

In 2022, the National Reconstruction Program received 3.06 billion pesos from various sources, including FONDEN, the Federal Expenditure Budget and other foundations, to fund disaster relief activities.