MEXICO Trends and Developments Contributed by: Javier Domínguez, Santiago Carrillo, Gabriel Torres and Diego Rodríguez, Ritch Mueller
similarity between the time zones of both countries; • the trade agreements that Mexico and the United States have entered into, such as the USMCA, which provide certainty to producers and reduce export costs; • the relatively low human capital costs and the high level of specialisation as a result of already established manufacturing industries, such as the automobile industry and the soft - ware industries; • the similarity between Mexican and US cul - tures, especially along the border; and • competitive production process supply costs. An analysis by the Inter-American Development Bank (IDB) recognises Mexico’s advantageous position. The IDB estimates that nearshoring will increase global exports from Latin America by USD78 billion in the short and medium term, of which 45% would be from Mexico. These and other factors have led to greater for - eign investment in Mexico, led by companies seeking to benefit from nearshoring by estab - lishing their production processes in Mexican industrial parks. For instance, at the beginning of 2023, the Ministry of the Economy reported that in 2022 the foreign direct investment in Mexico increased by 12% compared to 2021 and 48% of all foreign direct investment received was from new investors. This percentage of new investors is the highest the country has seen in the last ten years. The data shows that foreign companies that had not previously invested in Mexico want to set up operations in the country. This follows the reasoning behind nearshoring, which is to establish production chains near the target mar - kets: in the case of Mexico, the United States market.
In the private sector, BBVA Research, along with the Asociación Mexicana de Parques Industri - ales Privados, A.C. (AMPIP), conducted a sur - vey to quantify and anticipate the effects of nearshoring in Mexico. From that research, BBVA Research and AMPIP concluded, among others, that since the beginning of the US–China trade war in 2018, private industrial parks in Mexico have received approximately 830 new foreign tenants, 20% of which come from Asian coun - tries. On par with new tenants, AMPIP conclud - ed that already established tenants also want to take advantage of the nearshoring boom, as they noted that from 2018 to 2022, 21% of the already established companies expanded their leased spaces in industrial parks. Regarding the increase in demand from Asian countries for profitable spaces to establish pro - duction chains in Mexico, in late 2023 AMPIP officials reported that just over 40% of the men - tioned increase in demand during 2022 and 2023 came from Chinese companies. Overall, AMPIP reported that the total number of private industrial park tenants increased by 52% from 2019 to 2022. As AMPIP points out, many of the companies opting for nearshoring strategies are looking to establish in new industrial parks. To meet the demand for new parks, several mar - ket players have mentioned that new industrial projects are already under development. AMPIP, for example, reports that there are already 50 new industrial projects to be built between 2023 and 2024. Fibra Mty, one of the main investors in industrial portfolios in northern Mexico, esti - mates that it will, in the short term, expand the total area of its portfolio by nearly 52,000 square metres to have sufficient space for tenants that seek to implement nearshoring strategies.
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