Gross Fixed Investment in Mexico fell 8.86% at an annual rate in August, its worst setback since January 2021, according to seasonally adjusted figures from Inegi.
The indicator measures short-term spending on goods that are used in the production process, such as machinery and equipment.
By components, construction fell 7% and accumulated 13 months of declines. Inside, residential contracted 10% and non-residential contracted 18.5%.
The drop in non-residential construction was the most pronounced since August 2020, and also lasted 13 months with declines at annual rates.
For the Base financial group, the data reflects the negative impact of uncertainty due to the constitutional reforms in Mexico approved in the second half of 2024, particularly those to eliminate autonomous organizations and the Judiciary.
Read: Mexico’s economy contracts 0.3% in the third quarter due to a slowdown in industrial activity
Added to this is uncertainty due to President Trump’s protectionist trade policy and doubts about the future of the trade relationship between Mexico and the United States, according to an analysis by the group.
Base added that another key factor in the fall in investment in non-residential construction is the lower public spending on physical infrastructure in the first year of Claudia Sheinbaum’s administration.
The component made up of spending on machinery and equipment fell 10.5%, adding eight months with reductions at an annual rate. Internally, investment in national goods contracted 9.2% and investment in imported goods fell 11.9%.
Compared to the previous month, the indicator contracted 2.70% in August, the worst performance since the 2.84% of last December, according to Inegi data.
With original figures, that is, without seasonally adjusted, gross fixed investment fell 10.4%.
The Banamex group anticipated that Gross Fixed Investment will contract 5.8% this year.
Get inspired, discover and share. Follow us and find what you are looking for on our Instagram!
