The following report was prepared for the state of Washington Department of Community, Trade and Economic Development by Trade Management Services, Inc.

       The chronic shortage of housing and high demand for homes in Mexico represents a substantial pent up opportunity for all types of building materials and interior finishings.

      This need currently is being addressed by expanded government housing construction programs and a rebound in bank financing for home construction and improvement. The country’s overall construction industry, estimated at over $80 billion annually, is projected to grow by 6.6 percent in 2004. Residential, industrial and commercial construction together represent approximately one quarter of the total market, or some $20 billion annually.

      The market for luxury homes is estimated at approximately $3 billion, with growth of 4-5 percent expected during 2004 and 2005, according to the U.S. Commercial Service. Mexico’s National Statistics Bureau, INEGI, reports that overall expenditures on construction materials has averaged approximately $6 billion annually since 2001. The United States is reported to export some $1.7 billion in materials for housing construction to Mexico annually.

      Mexico’s construction industry includes what is classified as both formal and informal construction. The formal sector accounts for 25 percent of industry activity and represents projects carried out by the 9,000 companies affiliated with Mexico’s National Construction Industry Chamber (CNIC). Formal-sector companies generally rely heavily on government projects.

      The informal sector of the industry accounts for the other 75 percent of the market with projects carried out by professionals and companies not affiliated with the CNIC, in addition to individuals building their own homes without professional assistance. Both of these sectors are consumers of prefabricated construction finishings and materials.

Residential Construction

            Low-cost public housing programs are leading the reactivation of residential construction in Mexico. Federal programs called for construction of some 500,000 housing units by the end of 2003 and this number is projected to reach 750,000 units by 2006. Builders are now obtaining credit directly from government housing agencies such as the Federal Housing Fund (Fovi) and the National Workers Housing Fund (Infonavit). The age group that is the prime consumer of new housing, 20-49 years old, represents 47 percent of Mexico’s population. This group, however, is comprised principally of lower cost housing, as consumers with the purchasing power to afford more luxurious homes comprise less than 5 percent of ...

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