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Construction investment is still expanding at a solid pace.
2024/01/10 | Julio Ruiz

Gross Fixed Investment (GFI) expanded at a still strong 25.5% yoy in October (vs. market consensus of 23.0%), while private consumption rose by 5.2% (vs. market consensus of 4.7%). Adjusting for working days, GFI grew at a similar pace, taking the quarterly annual rate to 25.4% in October (from 26.1% in 3Q23). Using the seasonally adjusted series, GFI increased also at a resilient pace of 1.9% mom/sa, taking the qoq/saar to 12.8% (from 21.0% in 3Q23). GFI continues to be supported mainly by construction (qoq/saar of 16.9%), although machinery & equipment is also expanding at a decent pace (qoq/saar of 10.1%) which suggests positive signs from nearshoring. We note that construction is mainly associated to the public sector, reflecting the culmination of AMLO’s large infrastructure projects. Using calendar adjusted figures, private consumption’s quarterly annual growth rate stood at 4.6% in October (practically unchanged from 3Q23). At the margin, while private consumption softened in October falling by 0.3% mom/sa, momentum remains positive with the qoq/saar at 6.4% (from 5.9% in 3Q23). 


Our view: Our GDP growth forecast for 2023 stands at 3.4%. For 2024 we forecast GDP growth of 2.8% supported by an expansionary fiscal stance which should mitigate the effects of an expected deceleration of the U.S. economy. Benefits from nearshoring may also be a more relevant driver for the economy this year.


See detailed data below


Julio Ruiz