Increasing numbers of companies from around the world are establishing manufacturing operations in Mexico. In doing so, they’ve found a way to gain a competitive advantage in labor intensive production. And today, manufacturing in Mexico makes more sense from a business perspective than ever.
Mexico’s middle class has continued to grow over the last decade, resulting in a well educated young labor pool very much in touch with the modern world. The current Mexican government is making bold, sweeping reforms that are targeted to create an even greater business friendly climate in all areas from transportation to IT infrastructure. And of course, there is the sheer physical benefit of the close proximity of the country to the US that provides both time and cost benefits:
“…goods produced in Mexico had the lowest landed costs (that is, their price at a California port) for U.S. importers in 2010 of all key low-cost outsourcing countries.” U.S. Manufacturing-Outsourcing Cost Indexing, 2011
All together it adds up to Mexico being the strategic business partner of choice for these and more reasons:
- The average Mexican wage is $2.60 per hour
- Mexico has 44 free-trade agreements with countries around the world including the European Union
- NAFTA provides for tariff elimination or reduction for qualifying goods
- Expedited shipping for companies wishing to sell goods in the United States
- Same day air travel from most major cities in the U.S. and Canada
- Stringent, enforced intellectual property protection
- A common western culture
- A well established supply chain
Below is a general outline of average monthly wages for typical manufacturing personnel. All numbers are in U.S. dollars. These are before benefits. Wages do vary per region and industry. The IVEMSA team is expert in helping you select the best region for your goals and operational needs.
As well, productivity in Mexico is generally higher with typically a 48 hour work week (before overtime is required) vs the 40 U.S. hours per week. When compared to overall lower operational costs, the labor rate is an even better value. Thanks to the lower cost of living in Mexico, the labor rate is a win-win for all concerned.
IVEMSA, with over 30 years helping companies build successful Mexican manufacturing operations, is ideally positioned to help you maximize all of these benefits.