Mexico’s fixed capital investment grew 6% in July, the fastest pace in 2 years

Fixed capital investment in Mexico — money spent by the private and public sectors on long-term assets such as houses, factories and machinery — increased 6% annually in July, the strongest growth of any month in two years.

The national statistics agency INEGI reported the seasonally adjusted growth rate on Monday in its monthly report on gross fixed capital formation, a measure of fixed capital investment (FCI).

It is the product of a 5.9% year-over-year increase in private sector FCI and a 6.9% increase in public sector FCI.

Annual private sector FCI growth increased 2 percentage points from June to reach its highest level in 30 months, a sign that businesses’ confidence in their long-term economic prospects is improving.

However, public sector FCI growth slowed markedly from June, a month in which the annual expansion was 17.3%.

The overall FCI growth rate was up slightly from a 5.9% annual expansion in June. The month-over-month increase in FCI was 1.4%.

In an X post, Gabriela Siller, director of economic analysis at Banco Base, wrote that despite the growth in July, FCI was still 2.35% lower than the all-time high reached in July 2024.

In a separate post, she wrote that the FCI growth in July is “good news for Mexico,” but added that the data “is still insufficient to speak of a sustained recovery of investment flows and confidence to invest.”

In the first seven months of July, annual FCI growth was a more modest 1.7%. Siller is predicting 2% year-over-year growth in FCI in 2026.

Mexico recorded annual economic growth of 1.9% in the second quarter of 2026 and 3.3% in July. The economy grew just 0.4% annually in Q1.

Spending on construction projects drives FCI growth in July  

INEGI data shows that investment in construction projects increased 6.9% annually in July. Investment in residential projects grew 9.2% compared to a year earlier, while spending on non-residential projects such as factories and industrial parks increased 4%.

Investment in machinery and equipment grew 4.9% annually. Spending on imported machinery and equipment increased 9.9% compared to a year earlier, while spending on “Made in Mexico” machinery and equipment declined 3.1%.

In the first seven months of 2026, investment in construction projects increased 4.1% annually. Investment in machinery and equipment fell 1% in the same period.

Eduardo Valle, an economist at Coppel, said that the increase in investment in machinery and equipment in July is a “good sign” as it “signifies that companies are modernizing or expanding their productive capacity.”

However, the annual decline in spending on Mexican machinery and equipment is concerning, especially given that it occurred at a time when the federal government is aiming to strengthen Mexican industry with its Plan México economic initiative. Spending on “Made in Mexico” machinery and equipment declined 8% annually between January and July, while investment in imported machinery and equipment increased 3.5%.