CMIC: Encouraging investment increase in public work

For each peso invested in public work, 25 cents are generated in products, which explains the high contribution of construction to GDP, according to the Center for Economic Research (CIE, by its Spanish initials) from the Universidad Autonoma de Nuevo Leon (UANL.)      

Six years ago, the construction sector in Nuevo Leon generated 14,959 million pesos, according to indicators elaborated by the CIE, as result of the 14,811 million pesos investment intended to infrastructure in the Federal Expenses Budget.

Eight out of 10 economic branches in Mexico sell goods and services to the aforementioned sector, among which highlight the cement manufacturing and concrete products that address 43.5 % of its production to this industry. Followed by those that fulfill specialized works for construction with 31.2 % of purchase, lime sale, and plaster with 29.8 % and the sale of metal structures and forge products with 24.2 percent.

This way, infrastructure investment encourages industries as mining, cement, steel, Wood, petrochemical, electric and plastic.  Even services are benefited by demanding finance activities and insurance.

Besides, the investment in infrastructure also encourages the income increase; for every peso directly invested in public work, 76 additional cents are generated in the economy.

The same things happen with employment.  During 2013, when more than 14,000 million pesos were invested in the construction sector in Nuevo Leon, 29,918 direct jobs and 9,972 indirect ones were generated.

For 2020 3,852 million pesos were allocated to Nuevo Leon for infrastructure; this can cause a blow to the economy by 11,068 million pesos if compared against the multiplier effect generated by the resources allocated seven years ago.

According to the Mexican Chamber of Construction Industry (CMIC, by its Spanish initials) Nuevo Leon, that fact will continue to be analyzed to reveal the results of the next investment. Likely, the chamber upholds that the investment in public works generates a multiplier effect in the economy higher than in other industries, therefore it encourages the investment in the sector.