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"Mexico Infrastructure Report Q1 2013" Is Now Available at Fast Market Research

Fast Market Research recommends "Mexico Infrastructure Report Q1 2013" from Business Monitor International, now available

 

Boston, MA -- (SBWIRE) -- 03/13/2013 -- BMI View: Mexico's construction industry continues to progress along a robust growth path. The outlook is amongst the most stable in the Latin America region, and this is reflected in our infrastructure risk/reward ratings (RRRs), where Mexico takes the top spot in the region. The election of Enrique Pena Nieto spells further good news for construction sector growth, given his history as governor of the State of Mexico, where he presided over an ambitious infrastructure build-out and attracted private investors.

We anticipate growth to remain around the 4-5% level over the medium term, incorporating around a 0.5% increase as a result of the election (based on campaign pledges), with further upside once Nieto takes office in December 2012 and releases his National Development Plan for the country.

We expect growth in 2013 to post a slight uptick on 2012, at 4.6%. We are maintaining our 4.1% estimate for 2012, based on first half growth of 5.1% and our expectation that growth will have slowed in the second half of the year following the election and in line with a planned decline in government investment in infrastructure. Planned investments for the year were down around 10%, impacting both 2012 and 2013 industry value-added.

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New President, More Infrastructure

From 2013, we expect growth to accelerate slightly, and have factored in a 0.5% increase based on the election of Nieto, with real growth of 4.6% anticipated for the year. Based on campaign pledges that outlined a number of transport and social infrastructure projects, as well as his infrastructure-focused policies whilst governor of the State of Mexico, we believe Nieto will be a positive force for Mexico's infrastructure sector.

It is yet unclear how a number of programmes put in place by Calderon, such as the Second National Infrastructure Plan (NIP) (which outlines US$400bn investment over the 2013-2018 period) and FONADIN, will be continued under Nieto, although we anticipate a strong level of policy continuity.

Nieto has called for a greater private sector role in the economy and presided over the country's first healthcare public-private partnership (PPP) in the State of Mexico. For this reason, we expect the PPP law (approved in January 2012) to gain significant traction under Nieto.

However, we highlight the perennial problem that Mexico has faced with concessions - primarily the poor planning for infrastructure projects. The law will help to protect investors, which is especially topical given the May 2012 cancellation of a road concession awarded to OHL Mexico.

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