The fourth edition of the Credit Suisse Mexico Nearshoring Tracker report provides an overview of the arrival of companies in our country due to the relocation of firms.

The study found that, in relation to nearshoring or relocation, Mexico reported a 46% decrease in FDI, mainly due to the exit of accounts between companies. However, this does not cloud the long-term outlook, as the balance of new investments continues to increase 25%, in year-on-year terms.

Check here: Reynosa was the border market where industrial demand increased the most in 2022

In November, there were 5 manufacturing facilities announced, for a total of $1.1 billion. Most of the new investment came from the automotive sector (78% of the disclosed amount).

Other sectors also expand their operations in Mexico (such as Electronics, 13% of the amount). The most relevant announcement was the BMW electric vehicle plant, with an estimated investment of 850 million dollars in San Luis Potosí and which will be officially announced in February 2023.

According to the president of the Mexican Association of Private Industrial Parks (AMPIP), the country has attracted between 75-100 Canadian, Chinese, Korean and Japanese companies that have implemented or expanded operations in Mexico.

Although total FDI is down 4% YTD in real terms (US PPI adjusted), the stock of new investment continues to grow 25% year-on-year. In addition, a slowdown was already expected, considering that most investments are made in the first half of the year (70% in 2021). Credit Suisse remains positive on the momentum of industrial rents, taking into account the lowest vacancies of all time.

On the other hand, exports are having a slower expansion. Capital goods exports were up 7% year-on-year, while consumer goods fell 3% and intermediate goods were flat.

Of interest: Ciudad Juárez will continue as one of the leading growing industrial markets in 2023

According to AMPIP, nearshoring activity should generate $30 billion for Mexico in 2022 and is likely to continue to gain traction at the pace of manufacturing and export growth (+5% and +17% YTD, respectively). . Given recent supply chain bottlenecks, the migration of operations to Mexico is likely to continue, which should create opportunities for at least the next three years; however, there are still missing investments in infrastructure, such as energy supply, for the trend to gain momentum.

In Solili you can consult industrial warehouses available in Reynosa and Ciudad Juárez

Original note