Mexico Economic Outlook: Industrial Growth and Construction in 2023 with Projections for 2024

In December, industrial production reported a modest growth of 1.2% annually, marking a significant slowdown from the recent past and its lowest pace since November 2021 when it was emerging from the Covid-19 crisis. For the entire year, the industrial sector grew by 3.5% in 2023, exceeding the national Gross Domestic Product (GDP) growth of 3.1%, with an estimated 3.4% growth for the following year compared to just 2.3% for the total GDP.

Manufacturing was the main factor behind the industrial sector’s underperformance in the latter part of 2023, with a 2.3% year-on-year decrease in December, marking its worst figure since September 2020. However, an improvement is expected in January, particularly in the transportation equipment segment, which experienced a 3.6% decline. Despite the challenges in 2023, medium-term prospects for the manufacturing sector are positive, with projected increases in foreign investment and improved export performance due to the nearshoring phenomenon. On the other hand, the construction sector showed strong growth of 15.5% annually in December and a historic advancement of 15.6% throughout 2023, with growth projections of around 6.7% for 2024.

Resumen en español:

En diciembre, la producción industrial creció un 1.2%, el ritmo más lento desde noviembre de 2021, mientras que el sector de la construcción experimentó un aumento del 15.5%. A pesar de un crecimiento anual del 3.5% en la industria en 2023, la manufactura solo creció un 0.9%, afectada por la desaceleración de las exportaciones. Sin embargo, se espera un impulso en el sector manufacturero debido al aumento de la inversión extranjera y al fenómeno del nearshoring. Por otro lado, se proyecta un crecimiento del 6.7% para el sector de la construcción en 2024.