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21/07/2010

Last year's recession caused revenue at Mexican homebuilder Consorcio ARA SAB to stall but, as the economy improves this year, total sales will increase 10 per cent, company chairman German Ahumada Russek says.
 
"There's practically no inventory in Mexico City," Russek said. "People are definitely a lot more optimistic now that employment is recovering."
 
Homebuilders are poised to rally as Mexican jobs rise to a record and government-subsidised mortgages boost demand, analysts say.
 
"We are very bullish on the housing sector," Alejandro Garza, a money manager at Emerging Markets Management, said.
 
"The uptick in the domestic economy should also be very favourable for the homebuilders."
 
Jobs may surpass the record 14.48 million this month, Labour Minister Javier Lozano said, as Latin America's second-biggest economy recovers from a 6.5 per cent contraction in 2009, the steepest slump since the 1930s. Mexican Finance Minister Ernesto Cordero said last week that the government might increase its 4.1 per cent growth forecast for this year.
 
Mexico added 513,373 jobs in the first half, reaching the central bank's forecast of 500,000-600,000 new positions for all of 2010, after losing 181,271 positions last year. The data in Mexico include only jobs that guarantee pension and health benefits and require workers to contribute to the housing agency.
 
Economy Minister Gerardo Ruiz Mateos said last month that Mexico would probably add about 750,000 jobs this year by boosting manufacturing sales to the US, which buys about 80 per cent of its exports.
 
Joblessness in Mexico declined to 5.1 per cent in May after reaching 6.4 per cent in August 2009, the highest since records began in 2000.
 
Sales at Homex will increase as much as 14 per cent this year, following a 3 per cent gain in 2009, chief executive officer Gerardo de Nicolas Gutierrez said. The company, Mexico's second-biggest homebuilder by market value, added 2,000 jobs in the first quarter, he said.
 
"The improvement in job creation and recovery has a positive impact on domestic demand and consumer confidence," Gutierrez said. "That has a positive impact on the consumption of goods and services such as housing."
 
Bloomberg
 
This article can be found on South China Morning Post, Wednesday, July 21, 2010



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