The Mexican interior products market is highly dependent on exports to the US and is one of the fastest-growing markets in South America, registering a compound annual growth rate (CAGR) of 4.96% during 2007–2011 (the review period), higher than any of the EU nations. The market registered a slower growth rate of 0.03% and 0.11% during the global financial crisis in 2008 and 2009, due to the weak domestic financial conditions and reduced demand from the US. Mexico’s GDP registered a sharp decline of 6.7% in 2009, but confidence was restored in 2010 when GDP recovered to record a growth rate of 8.5%. Both the construction and housing industries experienced robust growth following 2009’s decline, which in turn increased demand for interior products.
Rapidly expanding Mexican middle class key to growth of interior products market
Increasing retail sales, particularly in the contemporary furniture segment, are a direct consequence of fundamental demographic shifts in Mexican society which are leading to the rise of a large middle class with high disposable income. Economic growth in urban areas and the expansion of international retailers are expected to generate opportunities for exporters. During the review period, the number of single-person households in Mexico grew rapidly, driving demand within the new housing products market. This is expected to drive the growth of the interior products market over 2012–2016 (the forecast period).
Review period growth driven by strong performance of Mexican construction industry
Due to rapid urbanization, the Mexican construction industry experienced unusually large growth during the review period. This growth is expected to positively impact Mexico’s hospitality, new housing, construction and renovation markets, and consequently drive demand for interior products.
Cultural changes encouraging investment in home interior products
A growing inclination towards western trends and designs, especially from the US, has led to a cultural change among Mexican consumers, giving them increased awareness of their personal surroundings and how they reflect their circumstances, lifestyle choice and personality. This change has been largely media-driven and is encouraging Mexican consumers to invest in home interior products.
Entry of new companies into the country expected to benefit interior products market
The Mexican government’s liberalized privatization policies and free trade policies encourage both new manufacturers and multinational retail chains to establish manufacturing units in Mexico. This is expected to generate employment opportunities and, as these newly established companies require office space, demand for both residential and non-residential buildings is also expected to grow over the forecast period.
Factors such as development of domestic retail and increasing disposable incomes also expected to be key growth drivers
Factors such as a higher number of middle-income earners, robust growth in the housing market, a significant increase in disposable incomes, the expanding number of single-person households and the development of domestic retail markets, are expected to drive the Mexican interior products market over the forecast period.
Timetric - The Mexican Interior Products Industry, Key Trends and Opportunities to 2016: Rising Exports to Drive Industry Growth
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