Due to its strategic location near the United States, a skilled workforce, and low production costs, Mexico has become the favorite destination for companies around the world to relocate their factories. Here, we’ll tell you which are the industries most benefited by this trend that began in 2021, offering our country a golden opportunity for economic growth.
As the relocation of companies has gained ground, especially in the northern states, challenges have arisen to offer the basic infrastructure that allows companies to move their production to this country, such as the supply of electricity and water resources, among others.
|We recommend you read: Learn about the new Nearshoring trend.
Despite the obstacles, Mexico offers significant advantages to continue attracting this type of foreign investment, one of them is that it has highly qualified companies for the development and construction of top-quality warehouses and industrial parks, such as Global Engineering Group (GEG).
Other advantages include lower labor and raw material costs, as well as logistics in transporting merchandise, typically, companies, mostly from the United States and Asia, seek to sell their products in the U.S.A. territory, as that country is the world’s largest consumer.
The existing trade agreements between Mexico and the United States are also an advantage that can facilitate the shipment of products to the neighboring country.
In 2022 alone, foreign companies occupied a total of 794,320 square meters of national territory for install their production, according to Market Analysis figures.
Monterrey, Saltillo, Mexico City, Tijuana, Ciudad Juarez, and Guadalajara were the cities that registered the highest arrivals of companies.
And the most benefited industrial sectors are…
According to Market Analysis data, the manufacturing sector occupies 91% of the industrial spaces adapted for this new modality, distributed as follows:
Automotive Industry
It represents 44% of the new factories installed in the country, and it is expected that this figure will increase in the coming years, because it was one of the sectors most affected by the disruptions in supply chains during the pandemic, and with nearshoring seeks to change its strategy.
The National Auto parts Industry (INA, by its acronym in spanish) indicates that the manufacture of parts for vehicles means 37% of the investment opportunities in the country resulting from nearshoring.
This sector stands out in the production of batteries and other components for electric cars that will be manufactured with the arrival of Tesla in the state of Nuevo Leon.
Metalworking Industry
It occupies 14% of the facilities dedicated to manufacturing in the country and is one of the sectors that has benefited the most from the exodus of foreign companies, mainly from China.
Mexico has specialized technology in metal molding and casting, which encourages the arrival of companies in this sector.
Plastics
7% of the plants relocated due to the nearshoring trend belong to the plastics products sector.
This material covers various sectors such as the medical industry, electronics, toys, industrial products, bottling, etc.
E-commerce
It is a business model that involves buying and selling products through digital media, and its use increased during the pandemic lockdown.
The rise of nearshoring has further boosted the revenues of this sector by 6%, and more companies are expected to compete in this field.
Furniture
The northern region of Mexico has become an attractive destination for wooden furniture manufacturers due to its proximity to the United States, accounting for 5.7% of production relocation.
Construction
The massive arrival of companies to our country has triggered a boom in the construction of warehouses and industrial parks, benefiting companies in this sector by 4%.
During 2021 and 2022, there was a historic demand for industrial-use buildings, and this trend is expected to continue in the coming years.
Consumer Products
They represent 3.9% of production relocation to Mexico and consist of everyday use products such as food, cleaning products, personal care items, electronics, branded clothing, etc.
The relocation of companies brings Mexico greater foreign investment, economic growth opportunities, job creation, and above all, increased competitiveness, so, without a doubt, we are living an important moment that could revolutionize the Mexican industry and position us as a pillar of global supply chains.
That’s why the country must seize the boom of this phenomenon and establish the right conditions to remain the favorite destination for foreign companies by investing in clean energy, developing infrastructure, and generating the talent required by companies.
