business

Mexico’s Construction Industry Posts First Expansion Since 2012

Mexico’s construction industry expanded in June for the first time in 19 months, adding to signs that the economy is rebounding after missing analyst estimates in seven of the last eight quarters.

Construction increased 2.2 percent from the year earlier, helping industrial production to expand 2 percent, according to data released today by the national statistics agency. The median estimate of 19 economists surveyed by Bloomberg was for industrial output to rise 2.1 percent.

“Industrial activity continued strengthening in June, very much in line with what the market expected,” Mario Correa, the chief Mexico economist at Bank of Nova Scotia, said in a note to clients today. “The construction industry finally showed a positive growth rate.”

Construction rose as government infrastructure spending increased and the housing market picked up. Cemex SAB, the largest cement maker in the Americas, said last month that growth in the residential real estate market would probably accelerate in the second half. The construction industry contracted 2.5 percent in December following housing policy changes that led to the collapse of the three largest homebuilders and delays in infrastructure projects under President Enrique Pena Nieto.

Manufacturing activity grew 3.4 percent in June from a year earlier, below the median analyst estimate of 4 percent, while mining contracted 1.3 percent and utilities such as electricity and water rose 1.3 percent, the statistics agency said.

Compared with the May level, industrial production fell 0.2 percent in June and construction gained 1.2 percent, its fifth straight monthly advance.

The car industry is helping fuel growth in Mexico. Automobile output has expanded 7.5 percent this year following record production of 2.93 million vehicles last year. Lawmakers have passed energy laws this month to bolster private-sector investment in oil and gas.

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