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Economic Outlook in Mexico CMIC Presentation to the North American Construction Federation Conference Sun River Reso

ECONOMI C OUT L OOK. Economic Outlook in Mexico CMIC Presentation to the North American Construction Federation Conference Sun River Resort- Bend, Oregon United States August 12-14, 2010. Economic Outlook. CONTENT. Economic Activity Financial Indicators External Sector

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Economic Outlook in Mexico CMIC Presentation to the North American Construction Federation Conference Sun River Reso

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  1. ECONOMI C OUT L OOK Economic Outlook in Mexico CMIC Presentationtothe North American ConstructionFederationConference SunRiver Resort- Bend, OregonUnitedStates August 12-14, 2010

  2. Economic Outlook CONTENT • Economic Activity • Financial Indicators • External Sector • Conclusions 2

  3. Economic Outlook 1. Economic Activity Total Gross Domestic Product Annual percentage change (%) GDP in Construction Annual percentage change (%) Source: Mexican Chamber of Construction Industry (CMIC), National Institute of Statistics, Geography and Informatics (INEGI), Ministry of Finance and Public Credit (SHCP) and International Monetary Fund (IMF). e: Estimates 3

  4. Economic Outlook 1. Economic Activity Index of Construction Activity change in annual percentage (% ) 2009 -7.5% 2010 -2.7% Construction Activity Percentage variation (%) Jan.-jun. 09 – Jan-jun. 10 4 Source: Management of Economy and Finance, Technical Director of the CMIC with data from INEGI.

  5. Economic Outlook 1. Economic Activity Public Resources AllocatedtoPhysical Investment Projectsfor2010 Progress in the Implementation of Public Resources for May 2010 Percentage advance (%) The average progress in May was of 10.4% Bids awarded/ counter amended budget PUBLIC SECURITY Source: Management of Economy and Finance, CMIC with data from the Ministry of Finance and Public Credit. 5

  6. Economic Outlook 1. Economic Activity Total Investment Annual Percentage variation (%) 2006 2007 2009 2010 2008 Construction Investment Annual Percentage variation (%) 6 Source: Management of Economy and Finance, CMIC with data from INEGI.

  7. Economic Outlook 1. Economic Activity Jobs in Construction Sector Prognosis 2010: (3.2%) 144,776 jobs generated/ recovered Annual percentage variation (%) Job performance period (2000-2010e) e. Estimate. Wageemployment in theConstruction Sector f NationalAccounts System of Mexico (Base 1993=100) Source: Management of Economy and Finance, CMIC with data from INEGI. 7

  8. Economic Outlook 2. Financial Indicators Mexican Stock Exchange Performance from May 2008 to June 2010 IPC DJ -2.6 -22.7 -34.1 2008 2009 2010 Investment Portfolio Flowsbyperiod, billions of dollars Source: Management of Economy and Finance CMIC with data from NYSE and Bank of Mexico 8

  9. Economic Outlook 2. Financial Indicators Interest Rate Exchange Rate % Pesos per dollar Country Risk Points Risk in the country has increased 9 Source: Management of Economy and Finance CMIC with data from Bank of Mexico, Banamex and CESL

  10. Economic Outlook 3. External Sector Exports and Imports Billions of dollars Trade Balance Billions of dollars Source: Management of Economy and Finance CMIC with data from Bank of Mexico. 10

  11. Economic Outlook 3. External Sector ATTRACTING FOREIGN INVESTMENT: Tourism Petroleum Revenues Remittances January - May Billions of dollars Billions of dollars 2009 2010 % • Tourism * • Remittances • Petroleum * • TOTAL: 3.7 3.8 7.5 9.2 8.7 -4.6 7.5 12.8 70.9 20.4 25.3 24.0 Foreign Investment Revenue in the External Sector Trend Billions of dollars Jan-Mar Billions of dollars 2009 2010 % Foreign Direct Investment 4 4.0 4.3 8.5 *January - April Source: Management of Economy and Finance CMIC with data from Bank of Mexico and SHCP. 11

  12. Economic Outlook 3. External Sector ACCUMULATION OF FOREIGN CURRENCY: International Reserves Billions of dollars Balance to July Billions of dollars 2009 2010 % International Reserves 74.4 102.0 34.5 Ability to Pay Foreign Debt Share (percentage) of GDP January - December Billions of dollars 2008 2009 % Total Foreign Debt 125.2 162.8 30.0 Source: Management of Economy and Finance CMIC with data from Bank of Mexico and SHCP. 12

  13. Economic Outlook 4. Conclusions Evolution of GDP and construction GDP Annual Percentage variation (%) Evolution of construction in GDP during 2010* Source: Management of Economy and Finance CMIC with data from INEGI and Bank of Mexico.Estimated figures at the close of the year.Note: Starting 2004, the GDP figures are calculated with the new INEGI 2003 base. 13

  14. Economic Outlook 4. Conclusions The international financial crisis had an extremely negative impact on the construction sector in Mexico, accumulating 21 months of negative numbers. In 2010 the largest amount of public investment was allocated for public investment for infrastructure, which should be exercised in a clear and expeditiousway. In an uncertain environment, resources must be handled properly and carefully. 14

  15. ECONOMI C OUT L OOK The Economic Activity in Mexico CMIC Presentation to the North American Construction Federation Conference Sun River Resort- Bend, OregonUnited States August 12-14, 2010

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