The construction industry in Mexico is estimated to have shrunk by 3.6% in real terms in 2025, defined by fractured US Mexican relations unsettling investors, weaker remittances flows and elevated building material costs. According to the National Institute of Statistics and Geography (INEGI), the construction industry’s value-add declined by 4.7% year on- year (YoY) in Q3 2025, preceded by YoY declines of 2.2% in Q2 2025 and 1.4% in Q1 2025.
According to the INEGI, the gross fixed investment on buildings fell by 6.7% YoY in the first nine months of 2025, preceded by an annual growth of 3.2% in 2025.
Despite economic uncertainty, Mexico’s construction industry is expected to recover at an annual average growth rate of 2.6% between 2026 and 2029, supported by investments in energy and transport infrastructure projects, in line with the government’s plan to invest MXN1.2trn ($60.1bn) to develop 5,645km of railway line across 24 states by 2030. Rising foreign direct investment (FDI) in the country will also support the industry’s output over the coming quarters. According to Secretary of the Economy Marcelo Ebrard, FDI grew 15% YoY in the first nine months of 2025. Additionally, in November 2025, the government announced the development of six new industrial parks with a total investment of MXN3.5bn ($175.3m).
It will expand industrial infrastructure in the municipalities of Tultitlán and Tultepec, thereby strengthening one of Mexico’s most active and strategically located manufacturing corridors.
Furthermore, the construction of industrial hubs and parks would support the growth in the construction industry. As of October 2025, 103 new industrial parks were under construction, representing an investment of MXN121.8bn ($6.1bn), up 12.1% from 2024. Of the total, 63% is allocated to new park development according to the Mexican Association of Private Industrial Parks (AMPIP).
Growth will also be supported by the National Electric System Strengthening and Expansion Plan 2025–30, announced in April 2025. The plan includes an investment of MXN624.6bn ($31.3bn) to add 29.1GW of new electricity generation capacity. It will fund 158 transmission projects and complete 42,221 electrification projects by 2030.
Also in March 2025, the government announced plans to incorporate 8.4GW of Battery Energy Storage Systems (BESS) by 2028. Furthermore, in August 2025, the Mexican government announced a plan to invest MXN164bn ($8.2bn) in the National Transmission Network. This initiative, part of the 2025–2030 Strategic Plan for the National Electric System, includes building 275 new transmission lines totalling 6,735km and 524 new substations by 2030.
Meanwhile, industrial construction output is expected to have recorded growth of 0.7% in 2025, before recording annual average growth of 2.3% between 2026 and 2029, supported by investments in manufacturing facilities and steel plants.
Outlook
The industrial construction sector is estimated to have recorded real growth of 0.7% in 2025, decelerating from annual growth of 9% in 2024. The slowdown is attributed to US tariffs affecting Mexico’s automotive sector, which accounts for 50% of industrial activity and 80% of vehicle exports. According to INEGI, the industrial production volume index fell by 3.3% year over year in the first nine months of 2025, while the mining production index declined by 7.8% year over year over the same period. In addition, FDI in Mexico’s automotive industry reached MXN155.7bn ($7.8bn) in the first three quarters of 2025, representing a 20.1% year-over-year decline, according to the economy ministry. Over the coming years, the industrial construction sector is expected to register average annual growth of 2.3% between 2026 and 2029, supported by investments in manufacturing facilities, as well as pharmaceutical and steel plants. In August 2025, the Mexican government announced MXN12bn ($601.1m) in new pharmaceutical investments aimed at expanding clinical research, manufacturing and technological capacity. This investment comprises several major projects, including a MXN3.5bn ($175.3m) investment by Boehringer Ingelheim to expand its manufacturing site in Xochimilco; a MXN3bn ($150.3m) investment by Bayer through 2030 to enhance its operations in Mexico, including upgrades to its pharmaceutical facility; and a MXN2bn ($100.2m) investment by AstraZeneca to expand clinical research and modernise its production facility in the State of Mexico.
Project analytics
The industrial construction projects pipeline in Mexico – as tracked by GlobalData and including all mega projects with a value above $25m – stands at $69.4bn. The pipeline, which includes all projects from pre-planning to execution with a value above $25m, is heavily skewed towards early-stage projects with 61.1% of the pipeline value being in projects in the pre-planning and planning stages as of December 2025.
The largest project in the pipeline is the $10bn Ixtepec Green Hydrogen Plant project is currently in its planning stage and involves the construction of a green hydrogen plant.
The pipeline also features the $6.5bn Pyrolysis Plant Development, which is currently in its preplanning stage and involves the construction of a Pyrolysis Plant in Ciudad Victoria, Tamaulipas, Mexico. The project involves the construction of a pyrolysis plant and related infrastructure, and the installation of equipment to convert plastic waste into fuel, a cooling system, oil storage tanks, gas solid separators and gas scrubbing systems.
Latest news and developments
Manufacturing Value-add registered a decline in Q3 2025. According to the INEGI, the manufacturing industry’s value-add declined by 1.9% YoY in Q3 2025, preceded by a YoY decline of 0.4% in Q2 and a growth of 0.9% in Q1 2025.
In cumulative terms, the industry’s value-add marginally declined by 0.5% YoY in the first nine months of 2025. Overall, the industry’s value-add fell by 0.1% in 2024.
Manufacturing orders also registered a fall in November 2025. Mexico’s Manufacturing Orders Indicator (IPM) slid in November 2025, registering a score of 48.3 that month, preceded by scores of 52.3 in October and 49 in September 2025.
The average IPM registered a score of 50.4 in the first 11 months of 2025, compared to scores of 51.1 over the same period of 2024. Overall, it fell marginally by 0.6% in 2024.
Meanwhile, confidence in the manufacturing sector reached 48.4 in November 2025. According to the INEGI, the confidence index of the manufacturing sector stood at 48.4 in November 2025, preceded by scores of 48.9 in October and 49.4 in September 2025. The average score of the index in the first eleven months of 2025 stood at 49.7, a decrease of 7.6% YoY, compared to the score of 53.8 over the same period of 2024. Overall, in 2024, it fell by 0.6%. Merchandise exports grew in September 2025.
According to the INEGI, Mexico’s merchandise exports, measured in US dollars, grew by 13.8% YoY in September 2025, preceded by YoY growth of 7.4% in August and 4% in July 2025. In cumulative terms, exports rose by 5.7% in the first nine months of 2025, increasing from MXN9.1trn ($455.8bn) in January-September 2024 to MXN9.6trn ($481.6bn) in January–September 2025. Overall, merchandise exports grew by 4.2% in 2024.
Industrial and manufacturing production volume indices further improved in September 2025. According to the INEGI, the industrial production volume index fell by 15.9% YoY in September 2025, preceded by YoY declines of 3.6% in August and 2.7% in July 2025. The average industrial production volume index fell by 3.3% YoY in the first nine months of 2025, decreasing from 104 in January–September 2024 to 100.5 in January-September 2025. By segment, the manufacturing production index fell marginally by 0.7% YoY, and the mining production index declined by 7.8% YoY during the same period. Overall, in 2024, the industrial production volume index grew marginally by 0.3%.
In August 2025, Ebrard announced the commencement of construction for the Wellness Development Hub in Huamantla. This hub is the first of 15 regional centres aimed at promoting industry, services, and tourism through both domestic and foreign investment. The project, which has a budget of MXN1.1bn ($540m), will cover 131 acres in Huamantla, located approximately 116 miles east of Mexico City. The physical construction of the hub is expected to be completed by February 2026. The project will be the first to be completed under Plan México, which is President Sheinbaum’s strategy aimed at attracting MXN5.5trn ($277bn) in investment by 2030. As of September 2025, 80% of the surface area has already been allocated to companies from Mexico, Germany and North America. Initial investors in the Huamantla hub include Knipping Automotive, Comercializadora Ragón and Integrated Services and Senior Management Administration. In total, 15 hubs will be established across 14 states, with projections indicating that these hubs will generate 300,000 jobs and contribute 1.5% to the GDP by 2030.
