At the end of November, the inflation figure for the month of October 2021 was released through the National Institute of Statistics and Geography (INEGI), which amounts to 6.24%, the highest annual rate since December 2017, when it reached 6.77%.

Let us remember that the Mexican economy contracted by 8.5% in 2020, when demand slowed significantly due to the uncertainty that the pandemic was going through.

Inflation in 2019, the year prior to the pandemic, moved from a minimum of 2.83% in December to a maximum of 4.41% in April, while during 2020 it reached a minimum value of 2.15% in April and a maximum of 4.09% in October of that same year.

Now, throughout 2021, when the vaccination processes were advancing in our country and industrial activities gradually returned to normal, we saw the lowest inflation in January with 3.54% up to the maximum reported in October of 6.24%.

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Inflation directly affects replacement costs for new construction when building an industrial building, where the main inputs such as steel and concrete already reflect the impact of the increase.

Already in June 2021 the Financier indicated that a 40% increase in steel prices and about 12% in basic construction supplies such as plaster, cement, concrete and PVC had an impact on the increase of up to 25% in construction works .

If we analyze the average prices of industrial buildings in real estate markets where demand has concentrated throughout 2021, such as Monterrey, Mexico City and Tijuana, we can see if inflation has impacted rental prices.

In Monterrey, the average rental price started in 2021 with 4.17 dollars per square meter per month to reach an average rent of 4.19 at the end of October, which represents an increase of 0.4% since the beginning of the year.

In the capital of the country, the rent price increase is more marked with 6.5% from January to October 2021, having registered prices of $ 5.41 and $ 5.76 dollars per square meter per month, respectively.

Of interest: Positive expectations for construction remain for 2022

Tijuana, which shows the lowest vacancy at the national level, reporting in October 2021 0.73% has registered in 2021 the largest increase of 8.4% in the rental price so far in 2021, closing October 2021 with the value of $ 5.6 dollars per square meter per month.

Inflationary pressures are expected to continue advancing next year, which will undoubtedly impact the rise in rents, mainly in those markets and corridors where there is low availability and where a replacement stock of industrial inventories is not advancing.