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Home > Business/Finance > Diversified Services > Shipping & Logistics
Mexico Freight Transporation Report Q2 2008
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At the end of November 2007 Mexican communications and transport minister Luis Tellez announced apackage of new infrastructure projects including highways, airports and seaports, intended as part ofPresident Felipe Calderón’s plan to boost economic growth and reduce poverty during the remainder ofhis six year term in office (which runs to 2012). To some extent this was a re-packaging of earlierannouncements made during the course of the year, but the administration’s plans are impressivenevertheless. The National Infrastructure Plan forecasts public and private average annual investment ofMXN420bn (US$38.44bn) across the 2007-12 period. It is designed to address current transportbottlenecks, which have acted as a drag on economic growth. It proposes 100 new highway projects,including the development of an interstate highway system and 4,000km of new roads in rural areas.Three new airports are to be built, with capacity expansions at a further 31. New intermodal railwaycorridors will be built, taking the total up to 18 from eight at present. Three suburban passenger rail linesare also due to be built in the Mexico City area. The infrastructure plan also calls for the construction offive new seaports and the modernisation and expansion of 22 existing ports. Container handling capacityis to be boosted from 4mn teus to 7mn teus. The plan came in the context of presidential announcementsaiming to boost average annual GDP growth in the country to 5%. The government also announced a2008 budget that boosted public sector investment by 45%, the highest annual increase in over twodecades, based on a tax reform package which boosted expected government revenues. Deputy financeminister Alejandro Werner said that spending on public sector investments would total around US$50bnin 2008, and would help the Mexican economy weather the expected slowdown in the US. ‘These thingsare going to act as mechanisms to compensate for whatever might be happening externally’ he wasquoted as saying by Reuters news agency.
BMI’s newly released Mexico Freight Transport Report notes that Calderón will encourage continuinggrowth in trade with the US and Canada - Mexico’s North America Free Trade Agreement (NAFTA)partners - and has specifically committed himself to boosting highway construction across the country.We are forecasting average annual road haulage growth in 2008-2012, measured in million-tonne km(mntkm), of 4.4%. Maritime freight growth will average 4.5% per annum (not least due to the increasedmovement of cargo through Mexican ports to avoid congestion in US ports). Over all modes, Mexicanfreight growth will average 5.1% in 2008-2012, ahead of GDP expansion of 3.8% a year. BMI concludesthat the value of the Mexican transport and communications will rise to US$131bn by 2012, representing11.5% of the country’s total GDP.
During the presidential election campaign in 2006 Calderón spoke of trying to emulate the big transportinfrastructure investment surges in European economies like Ireland and Spain, which in his viewunderpin their current strong growth rates. BMI rates Mexico’s regulatory and competitive environmentshighly in relation to other regional markets. In this report, in fact, we set the country’s overall freightrating score at 50.6 (out of a maximum of 100). This is a respectable score in the context of the majorLatin American freight markets that we cover.
The total value of transport and communications GDP will rise to US$131bn in nominal terms by 2012,representing 11.5% of Mexico’s GDP. The transport and communications sector employed 1.92mnpeople, or 4.6% of the labour force, in 2006. We see that figure rising to 2.04mn by 2012, although as aproportion of the labour force it will remain constant at 4.6%.
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