Mexican peso depreciation causes substantial hike in cement prices

The depreciation of the Mexican peso against the US dollar has impacted negatively on the price cement and other building materials. In the year to date, cement prices have increased 14.8 per cent and between January 2015 and October 2016, prices have seen upward adjustments of 30 per cent, according to the National Institute of Statistics and Geography (Inegi).

The increase in building material prices is due to their indexation in dollars and are quoted in international prices.

The rise in prices of materials such as cement, concrete and rebars has decreased the profit margins of development companies as the firms are unable to increase house prices automatically, particularly in public works projects.

Analysts expect construction activity to conclude the year with mixed results as development of industrial infrastructure will be subdued while civil works are predicted to report a setback. High-value residential housing is forecast to see limited growth.