Mexico: a tough year ahead

Published 22 January 2018

The slowing housing sector and constraints to the public purse have impacted Mexican cement demand in the past two years. The year ahead will present further uncertainties as the country goes to the polls to elect a new president and NAFTA is up for renegotiation. However, the domestic cement industry is in relatively good shape to weather the risks. By Luis Manuel Martinez, S & P Global Ratings, UK.

Mexico's cement industry is well equipped to face a challenging 2018. (Pictured: Cementos Moctezuma's Cerritos works)

When it comes to cement, demand is largely driven by the general health of an economy and its growth prospects. Cement consumption strongly correlates with residential and nonresidential construction activity, and the development of infrastructure projects. Indeed, the link between GDP growth and construction is fairly tight, despite the typical 3-6 months’ lag between the two. And that is precisely why cement producers in Mexico are not on a solid footing these days.

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