Mexico’s electoral body, the National Electoral Institute, announced preliminary results and quick count of the 2024 elections on 3 June 2024.
According to the preliminary results, the National Regeneration Movement (Morena) party’s candidate Claudia Sheinbaum won more than 58% of the votes, with the opposition candidates Xochitl Galvez Ruiz winning between 26.6-28.6% of the votes, and Jorge Alvarez Maynes winning between 9.9-10.8% of the votes.
Sheinbaum will now be the country’s first female president and will begin her presidency on 1 October 2024.
A leftwing former Mexico City mayor, Sheinbaum had campaigned on continuing the political course set over the last six years by her political mentor and outgoing leader Andres Manuel Lopez Obrador (AMLO), whose popularity among the poor led to Sheinbauz’s triumph in the recent elections.
In addition to the presidency, more than 20,000 posts were contested at the federal, state, and municipal levels in Mexico’s largest election ever.
Morena and its allies are likely to win a two-thirds supermajority in both houses of Mexico’s congress (the Senate and the Chamber of Deputies), which will allow the coalition to pass constitutional reforms without the opposition’s support.
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By GlobalDataAccording to the early results, the Morena coalition will win a minimum of 346 seats in the 500-capacity lower house and could win between 76 to 88 seats in the 128-person Senate, where 85 seats are needed for a supermajority.
The markets reacted negatively to Sheinbaum’s landslide victory, with both the stock market and the value of the Mexican peso dropping, amid fears that a supermajority in the country’s congress could bring constitutional changes, diminishing the checks and balances in place.
Mexico’s benchmark stock market index fell by 6.1% on 3 June 2024 while the peso hit a seven-week low of 17.75 to the US dollar on the same day (marking a 4.29% drop), according to the London Stock Exchange Group data; it ended the session down 3.8% at 17.67 per US dollar, marking its weakest daily close since November 2023.
The fall in stocks and the value of peso is due to rising concerns that the Morena party will have a clear path to pass controversial constitutional reforms, that were sought by AMLO; these reforms include various issues in areas such as pensions and the energy sector, along with controversial judicial and institutional reforms that are likely to weaken the separation of powers and see the disappearance of some independent regulatory agencies.
Claudia Sheinbaum, who is a climate scientist and holds a PhD (Doctor of Philosophy) in energy engineering, is committed to sustainable development and is poised to transform the country’s energy landscape throughout her tenure.
Sheinbaum’s roadmap for 2024-2030 reports that her administration will align with the former president AMLO’s energy policy, which is based on energy self-sufficiency through the strengthening of the state-owned oil company Petróleos Mexicanos (Pemex), and the rehabilitation and acquisition of refineries.
Sheinbaum unveiled a plan in April 2024 to invest more than 225.9 billion pesos ($13bn) in new energy generation projects until 2030.
This investment will be made in increasing wind and solar power generation and modernising five hydroelectric plants in the country.
Sheinbaum had campaigned on a promise to continue the pro-worker policies of former president AMLO and had pledged to preserve democracy, respect business freedom, and facilitate private investment.
Upon taking office in October 2024, however, she will face daunting challenges such as high murder rates, addressing a budget deficit, and spending on social programmes.
One major challenge facing the new government will be managing the state energy company Pemex, which is the world’s most indebted oil company.
If Pemex’s debt is not restructured, it is likely to drag down the investment-grade rating of Mexico’s sovereign debt, because the state will have to bail out the company.
Although Sheinbaum has pledged to provide support for Pemex and resist any attempt to privatise its assets, she has failed to provide any details.
Sheinbaum’s election also presents a mixed picture for the construction industry, with her pledge to continue with AMLO’s policy in the infrastructure sector being viewed as a positive development for the sector while her announcements to continue the austerity drive being viewed as a negative development.
Moreover, the government’s high budget deficit following AMLO’s splurge on welfare programmes and infrastructure developments in recent quarters will likely limit the new government’s ability to continue investing in the infrastructure sector despite infrastructure being a priority for the upcoming administration, with Sheinbaum speaking about the need for new highways, trains, airports, and ports in her acceptance speech in early June 2024.
The administration of the outgoing president will leave some infrastructure projects for the next government to finish.
On 3 June 2024, AMLO reported that most of the government’s projects, including the Maya train project and 20 hospitals, would be finished before he left office.
However, some work that is related to customs refurbishment, including the Nogales railway project, which will remove railway tracks from Nogales to facilitate the expansion of the commercial port of Guaymas, will be finished by the next administration.
The federal government’s focus on completing flagship infrastructure works has boosted the construction sector’s output in recent quarters.
According to the National Institute of Statistics and Geography, the Monthly Indicator of Industrial Activity (IMAI) in the construction sector rose by 9.6% year-on-year (YoY) in March 2024, following YoY growths of 12.2% in February and 16.3% in January 2024.
The average IMAI in the construction sector rose by 12.6% in the first three months of 2024, increasing from 95.1 in the first quarter (Q1) of 2023 to 107.1 in Q1 2024. Overall, it registered an annual growth of 15.5% in 2023 and 2.8% in 2022.
A notable increase has been observed in the demand for infrastructure projects such as energy, warehouses, industrial parks, and distribution or logistics points.
Construction in Mexico is expected to experience significant growth in the remainder of 2024, with the Mexican Chamber of Construction Industry expecting the industry (as per the latest estimates announced in early June 2024) to experience growth of between 3-5% in 2024.
