El Economista – Mexico City
In March, the fixed investment made in Mexico, measured through the Monthly Indicator of Gross Fixed Capital Formation (IMFBCF) grew 0.8% monthly seasonally adjusted, resulting in three months of gradual improvement, according to data published this Tuesday by the National Institute of Geography and Statistics (Inegi). In February the growth had been 0.7%.
The March advance was motivated by higher purchases of transportation equipment of national origin (4.9%) and higher expenses in non-residential (2%) and residential (1%) construction.
On the contrary, Decreases were observed in purchases of imported capital goods, both transportation equipment (-4.7%), and machinery and equipment (-0.5 percent). Investment in machinery and equipment of national origin also fell 1.6 percent. Thanks to the advance in March, the 2018 base IMFBCF grew to 115.9 points, although this reading is still below the 116.3 units of last August, which is its best historical level to date.
After an outstanding performance during the first eight months of last year with annual growth of up to 26% (with a cut-off in August) driven by spending on non-residential construction, Total fixed investment moderated at the end of 2023, with monthly falls in September, November and December.
However, throughout last year fixed investment grew 18.1%, its largest increase since 1996 (18.5%). Thanks to this, the IMFBCF based on original figures rose to a record level of 110.7 points. This performance also earned it, on the spending side, the driving force of the Gross Domestic Product (GDP), which grew 3.2 percent.
Quarterly growth
Cumulatively, from January to March fixed investment grew 9.8%, a rate that continues to compare very favorably with GDP growth in the period, which was 1.6 percent. The purchase of imported transportation equipment is the segment with the greatest advance with 35.3% growth, followed by non-residential construction expenses (23.7%) and spending on transportation equipment of national origin (11.2%).
From the perspective of the type of investor, private investment—the most important—grew 9.8%, while public investment grew 9.5%. The advance in public investment coincides with the 23.3% expansion of the federal government's physical investment spending to $224.98 billion, according to data from the Ministry of Finance and Public Credit (SHCP).
