Residential and nonresidential building construction in Mexico:
Assessing its economic performance
Abstract
Building industry continues to be an outstanding activity in Mexico. This paper analyzes its construction performance considering basic economic elements. For statistical purposes, this activity is classified in residential and non-residential premises. The period under analysis is from 2003 to 2022 with an annual frequency. Gross output of residential building construction growth has grown 1.9%, below the parallel nonresidential sector (2.6%). The expansion of gross output rest of the economy has been 2.5%. In the aftermath of the Great Recession in the United States, the number of Mexican job posts in building construction has been declining. Unlike nonresidential building construction, the coefficient of employment with respect to intermediate consumption is elastic regarding residential building construction. Hence, this last sector exposes a labor intensive profile. Compensation of labor continues to depict a declining share of gross value added as from the second decade of this century. A rise of this last variable in relation to gross value added itself, brings about a negative coefficient in product wages with one year lag. However, product wages rose higher than real wages in residential and nonresidential building construction. This wedge has operated in the benefit of labor as a final consumer.
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