Although the general slowdown affects most subsectors, services, especially video streaming and data centers, stood out with growth of up to 17% in the second quarter of 2024.
The Information and Communications Technology (ICT) industry slowed down for the second consecutive quarter. The technology industry in Mexico grew 4.8% in the second quarter of the year, a figure lower than the 4.9% of the first quarter and the 5.7% of the fourth quarter of 2023, according to the analysis of the consulting firm Select.
In the year-on-year comparison, the ICT industry also shows a slowdown in the first six months of the year. While this sector grew at the same rate in the second quarter of 2024 as in the same period of 2023, during the first quarter, it only grew by 4.9% compared to 6.4% in 2023.
According to Alejandro Vargas, Research Manager at Select, the main reasons for this slowdown in the technology industry in Mexico include a certain caution in investments due to the electoral process on July 2, which entails a slowdown in decision-making on projects.
"Many businessmen and many Chief Information Officers (CIOs) were kicking the ball into gear to invest once there was more clarity on the economic and political issue," Vargas said at a press conference.
Services are the exception
Unlike the entire technology sector and sub-segments such as device manufacturers and distribution channels, service providers showed exceptional growth during the second quarter of the year.
Services grew by a total of 9.1% during the second quarter of the year, according to Select. However, within this subsector there are activities that showed double-digit growth in this period, such as video streaming platforms, data centers and software developers, which grew between 10 and 17%.
In contrast, telecom operators grew 5.6% in this period, while channels only increased their business by 3.7% and manufacturers by 2.4%.
"Due to the need of users to have lower latency and real-time responses, investments in data centers have grown and that is what is contributing the most to growth," he said.
Optimism
Despite this slowdown in the technology industry in Mexico, Select shows that there is optimism within the sector for the coming months, due to the possible reactivation of projects halted during the first half of the year in the second quarter of 2024 and the first quarter of 2025.
The Select Technology Industry Expectations Index shows growth in both expectations for next month and expectations for the third quarter of the year.
“Something that has excited the ecosystem is the new administration's digital strategy, with very clear guidelines for digitizing procedures and making them more efficient,” said Vargas.
