Productive Capital Sees Highest Rise Since 2020

Mexico's physical investment, considered the primary engine for future economic expansion, saw a significant acceleration in April, increasing by 4% compared to the previous month. This marks the second consecutive month of growth and the strongest performance since November 2020, when it rose 6.1% after accounting for inflation and seasonal adjustments.

The robust growth is largely attributed to a substantial 12.4% surge in residential construction investment. While investment in non-residential construction experienced a more modest increase of 0.1%, the overall capital expenditure on machinery and equipment climbed by 2%.

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Residential construction, private projects, and machinery imports could have influenced this. Works related to mobility, airports, stadiums, transportation, and urban development in the host cities of the Football World Cup may have played a role.

Humberto Calzada, Chief Economist for Rankia Latinoamérica, noted that the upturn is driven by residential construction, private projects, and the importation of machinery. He suggested that infrastructure works related to mobility, airports, stadiums, transportation, and urban development in cities hosting the FIFA World Cup could have played a role in this positive trend.

Carlos Hernández García, Director of Analysis at Valdez Capital, concurs that a portion of this recovery likely stems from investments linked to the upcoming World Cup. This renewed investment activity signals a potentially positive outlook for Mexico's economic future, driven by both domestic construction and large-scale infrastructure projects.

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It is likely that part of this recovery responds to the start of investments linked to the celebration of the World Cup.