MEXICO CITY Mexicos
construction sector contracted 2.3 percent year on year in the
first quarter due to a squeeze on cash flows and delays to
public works spending as a new government took power.
In March, construction activity
shrank 5.2 percent from a year earlier, according to the
Mexican Chamber of the Construction Industry (CMIC).
"At least 2,000 small and
medium-sized enterprises in the construction industry have been
facing a liquidity problem," CMIC president Luis Zarate Rocha
Federal, state and local
governments, and institutions such as the national
workers housing fund institute Infonavit, in some cases
havent been making payments on time to small and
"We have a huge liquidity
problem, therefore the construction companies have asked to
borrow money to make payroll," Rocha said.
Not all governments have delayed
payments, he said, noting as exceptions Nuevo León,
Sinaloa, Michoacán, Veracruz, Chiapas and Mexico
Another factor that affected
construction activity in Mexico was the handing over of power
to the Institutional Revolutionary Party (PRI).
PRI leader Enrique Peña
Nieto was elected Mexicos president last July, but only
took office Dec. 1 following disputes to the polls results.
This delayed the rollout of
fresh government spending on public works. "The government
delayed the presentation of the new national infrastructure
program, which also delayed the public works program," CMIC
The program is expected to be
launched by the end this month, and includes construction and
upgrades of the countrys transport networks.
The last six-year plan
identified 300 projects. The 2012-18 program is expected to
target almost 500 infrastructure projects.
A version of
this article was first published by AMM sister publication