Mexico/US manufacturing Ties: Strong and Getting Stronger

07.08.15

While manufacturing in South American countries like Brazil and Argentina is slumping, in Mexico it’s strong and getting stronger every month. In fact, since 2009, cross border trade volume between the U.S. and Mexico has increased nearly 90% with no sign of stopping.

 

With average manufacturing wages in Mexico now almost 20% lower than China,* Mexico continues to gain ground by creating high value products such as automotive, aeronautical, electronics and plastics which are particularly common in the northern states. Even southern Mexico is experiencing manufacturing growth in textiles and clothing as a result of China’s growing labor costs.

 

In comparison with China, Mexico’s higher GDP and well educated workforce make for a more stable environment and reliable workforce. Mexico’s federal and state governments are making economic incentives, particularly for high-end manufacturing such as aerospace and automotive, readily accessible. And the availability of quality industrial real estate is also a major driving factor to foreign company relocation.

 

It’s true that ongoing economic and energy reforms are taking time to settle down and yield results. Still, leading economists globally have endorsed the steps that Mexico has taken to become both more attractive and stable to foreign investment; and as more companies continue to leave China, Mexico continues to benefit.

*Forbes, April 8, 2015
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