Mexico's construction slump deepens as Banxico pauses interest‑rate cuts

The Mexican construction sector has entered a two‑year downturn, with activity falling continuously and contributing to a broader slowdown in industrial output. In parallel, the Bank of Mexico ended its series of rate reductions by cutting the benchmark to 6.5% and signalling a pause despite lingering inflation risks. Authorities cited weak domestic demand, modest price pressures and a recent decline in inflation to 4.45% in April, while noting external risks from the Middle‑East conflict and the peso’s resilience. The combined trends highlight ongoing challenges for Mexico’s economy and signal a cautious monetary stance.

The central bank’s decision aims to balance growth support with price stability, as inflation is expected to converge toward the 3% target by the second quarter of 2027.