New Construction market report from Business Monitor International: "Mexico Infrastructure Report Q4 2013"
Boston, MA -- (SBWIRE) -- 10/17/2013 -- Mexico's construction sector started 2013 on a weak footing as President Nieto's transition to power caused a period of low activity. This was coupled with a financial crisis amongst the homebuilders, which saw construction activity in the segment crash. As a result, we have downgraded our 2013 outlook for growth to just 1.7%. However, our medium term outlook for growth in the sector remains firmly in place, supported by the announcement of the US$315bn National Infrastructure Plan. Between 2013 and 2017 we anticipated annual average construction industry growth of 4%. Energy & utilities infrastructure will likely lead growth but transport investment - specifically rail and roads - is also expected to be significant.
View Full Report Details and Table of Contents
Infrastructure high on Presidential agenda
President Pena Nieto has called for a greater private sector role in the economy and presided over the country's first healthcare PPP in the State of Mexico. For this reason, we expect the PPP law to gain significant traction and spearhead a wave of new infrastructure projects. We have already seen a commitment from the government to pursue reforms in the Energy sector and provide investment across the sector.
Existing pressures on Mexican homebuilders have been exacerbated however by the government's latest housing policy announcements. Fears that the measures will result in write-downs of land value, high cost outlays and the uncertainty over government support during the transition is weighing on investor perception. Subsequent fears over cash flow and the cost of capital is creating a vicious cycle, with homebuilder equities tanking and bond yields spiking. We see little short-term upside potential for the sector until more details are released; however, longer term, government measures should create a more efficient and sustainable housing sector.
Energy sector to drive change
We believe that the ability for Mexico to reverse its severe macroeconomic imbalances and generate the robust growth necessary to propel it to 'developed market' status still hinges on the passage of substantive energy sector reform. We have registered US$17.6bn in projects either under way or planned in the subsector. Consequently, a strong project pipeline is guiding optimistic forecasts.
We forecast annual average growth of 12.1% for the country's water infrastructure sub-sector, 7.5% for power plants & transmission grids and 7.6% for oil & gas pipelines. In the transport sector, tangible improvement into attracting private investors will need to be seen before we factor in stronger growth to our forecast; however, we have upgraded our outlook for the rail sub-sector, based on a dedicated plan to expand rail capacity in the country, which is showing signs of progress and has government support.
About Fast Market Research
Fast Market Research is an online aggregator and distributor of market research and business information. Representing the world's top research publishers and analysts, we provide quick and easy access to the best competitive intelligence available. Our unbiased, expert staff will help you find the right research to fit your requirements and your budget. For more information about these or related research reports, please visit our website at http://www.fastmr.com or call us at 1.800.844.8156.
Browse all Construction research reports at Fast Market Research
You may also be interested in these related reports:
- China Infrastructure Report Q4 2013
- United Kingdom Infrastructure Report Q4 2013
- South Korea Infrastructure Report Q4 2013
- Indonesia Infrastructure Report Q4 2013
- Singapore Infrastructure Report Q4 2013
- India Infrastructure Report Q4 2013
- Czech Republic Infrastructure Report Q4 2013
- Nigeria Infrastructure Report Q4 2013
- Vietnam Infrastructure Report Q4 2013
- Colombia Infrastructure Report Q4 2013