Green Building Sector 2011

An Expert's View about Environmental Technologies in Mexico

Last updated: 26 May 2011

Similar to other emerging economies Mexico is moving towards “green” or friendlier environmental activities. The construction industry has embraced the green building movement. Mexico has been joined as a World Green Building Council (WGBC) member by Brazil and Argentina, while other nations in Latin America are developing green building councils. Latin America can learn from European, Canadian and United States best practices and occasional missteps to reap the cost and health benefits of green buildings. It also can show other countries how to use simple, moderate-cost strategies from its own longstanding building practices to achieve green building advantages.

Green Building, also known as green construction or sustainable building, is the practice of creating structures and using processes that are environmentally responsible and resource-efficient throughout a building's lifecycle. This includes design, landscape, construction, operation, maintenance, renovation, and deconstruction. This practice expands and complements the classic building design concerns of economy, utility, durability, and comfort.

Market Demand
Mexico has a tradition of architecture that favors environmentally sensitive, small-footprint building practices and designs. However, policy efforts to promote green buildings are relatively new and generally focused on the housing sector. Mexico’s National Housing Commission (CONAVI), INFONAVIT (the largest housing fund for workers in Mexico), the Mexican Chamber for the Construction Industry (CMIC), the National Chamber for Consulting Firms (CNEC), the National College for Architects, the Mexican Council for Sustainable Edification and the Association of Firms for the Saving of Energy on Construction and Buildings are documenting green
practices and working to define criteria for green buildings and homes. Additionally INFONAVIT has created a “green mortgage” program, supported by mandatory employer and employee contributions.

In 2009, Mexico’s government pledged to stimulate the construction sector as a way to spur economic growth. Government investment, estimated in 2010 at $119 billion dollars, has helped the construction sector’s performance not fall as drastically as it could have with the current economic situation. The government’s infrastructure investments are aimed not only to stimulate the economy but also addressing the lack of infrastructure investment projects in the past and increasing the competitiveness of the country. Inflation affected construction costs by nearly 5% in 2010, according to the Index of Builder’s Prices from the Bank of Mexico. An inflation rate of 4.5% is expected in 2011. While the Mexican construction industry contracted 5% in 2010, official sources predict the industry will grow by 2.3% in 2011.
The total value of the construction sector in 2010 was $70.28 billion dollars. The major portion (48%) was allocated to PEMEX investment projects, the construction of houses and multi-use buildings (21%), and highways (10%). The Mexican states that received the major investments from the federal government were: Mexico City (17%), Estado de Mexico (13%), Nuevo Leon (10%), Jalisco (7%), Veracruz (6%), and Campeche (4%).

Although green construction in Mexico continues on a growth trend the actual numbers for the sustainable construction remain small, Mexico only has five buildings with the LEED certification and those are: the National Business Center of Chihuahua, the HSBC headquarters building in Mexico City, the Loreto Bay Development (residential and commercial project), ITESM Campus Chihuahua and the HINES Industrial Building in San Luis Potosi. Over 80 subscribed for certification process, while rating programs, market surveys, and anecdotal evidence indicate tremendous growth in this field. Projects include real estate branchs for tourism, marine, thematic and recreational parks, golf courses, residential areas and housing, town planning, industrial and commercial. Without widespread performance data and agreed upon performance benchmarks for comparison, no method exists to determine precisely how many buildings are green. As many other countries Mexico will continue supporting these green initiatives for the construction and sustainable development. Several investors and developers are moving towards into the construction of green buildings, some of them will be LEED certified and others will only be eco-friendly buildings.

Mexican and foreign travelers and expats are also starting to show preferences for companies (hotels, builders and developers and other businesses) that have ecological and socially-responsible practices as well as those that have implemented green building materials and technologies. This tendency will drive future decisions made by companies from small businesses to major corporations and the government to favor such innovative and sustainable projects.

Market Data
Mexico is catching up with the green design, construction and building practices that have seen a tremendous evolution over the recent years. For more than 20 years, Mexican companies have been selling green building products with increasing acceptance. Such products include low volatile organic compound materials (low VOC) and paints, recovered materials, full solar and photovoltaic systems, wind power, light tunnels and more including the upgrade and recovery of previously-contaminated sites.

The slower acceptance of such technologies and services in Mexico has to do in part with the fact that the Mexican government has subsidized the cost of electricity over the years to the point where the payback rates are lengthy. This makes the technology less cost-effective to incorporate in green design and building practices and structures. As costs are coming down, technology evolves and Mexican and foreign consumers and taxpayers are becoming more interested in implementing the technologies, more and more builders are using the practices.

Since 2001, government agencies and private sector groups have been experimenting with the use of alternative and renewable energy sources on a large scale in Mexico. Several of them are working to tie in with the energy grid to feed the national system and obtain carbon credits or net zero operations.

According to the sources consulted, the potential value of the market for the sustainable construction would be able to reach the $376 million dollars in 2011.

Read the full market research report

Posted: 26 May 2011, last updated 26 May 2011

See more from Environmental Technologies in Mexico

Expert Views    
Water Opportunities in Mexico   By UK Trade & Investment
Laboratory and Scientific Instruments   By U.S. Commercial Service
Air Conditioning and Refrigeration Overview   By U.S. Commercial Service
Market Opportunities for the Renewable Energy Sector   By U.S. Commercial Service
Hot Tips    
The Plastic Industry in Central Mexico   By U.S. Commercial Service Mexico