How Can the Boom End Without Ending the Expansion?

During that period, the country’s main industrial markets across Northern, Central, and Bajío Mexico added more than 30 million square meters of new inventory, pushing total inventory beyond 100 million square meters. And today, the market’s latest position within that cycle can be summarized in two figures.

As of the first quarter of 2026, construction activity associated with industrial, commercial, and service buildings stood about 9% below its 2024 peak, but still 5.6% above the average recorded in 2023. At the same time, the 1.6 million square meters of new industrial inventory delivered during the quarter were approximately 15% below the first quarter of 2024, but roughly 27% above the same period in 2023.

This suggests that the adjustment observed since late 2024 has not erased the expansion accumulated during the previous years. The explanation is simple: industrial buildings take time to construct. By the time activity began to moderate, a significant portion of the expansion driven during the previous years had already translated into a substantial increase in the country’s industrial inventory. As a result, a slowdown reduces the pace at which the market continues to grow, but it does not eliminate the expansion already achieved.

Consequently, the market’s challenge shifted from adding space as quickly as possible to the speed at which that new inventory could be occupied.

That shift soon became visible in market indicators. As absorption began to moderate, a growing share of completed buildings consisted of speculative projects. As a result, the vacancy rate started to trend upward—not because of a broad-based contraction in demand, but because supply continued entering the market at a faster pace than space was being absorbed. Together, both results reflect the transition from a market defined by limited supply to one where the pace of absorption is becoming increasingly important.

Looking ahead, even as the real estate cycle continues to evolve, the construction of industrial, commercial, and service buildings will continue to play a major role in shaping construction activity in Mexico. Not only because of the scale the industrial market has now reached, but also because, even in a year when the real value of total construction output was virtually flat, this segment accounted for about 55% of building construction output and nearly 26% of total construction output.

To stay up to date on the industrial real estate market and access additional analysis and market indicators, visit SiiLA Market Analytics or contact us at contacto@siila.com.mx.

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¹ Methodological Note: The indicators are constructed using data from INEGI’s National Survey of Construction Companies (ENEC). Current-value construction output is deflated using the National Producer Price Index (INPP) for construction, expressed as indexes with a 2018=100 base year, and seasonally adjusted using X-13ARIMA-SEATS (or STL when X-13 does not converge). For comparison with SiiLA, monthly series are aggregated to quarterly frequency and four-quarter moving averages are used to reduce short-term volatility. The Industrial, Commercial and Service Buildings category is used as a proxy for non-residential construction activity; therefore, the results should not be interpreted as an exclusive measure of industrial construction.