Mexico is experiencing an unparalleled nearshoring moment | Article

David Ordaz

hourA few days ago National Convention Index 2023, where the unparalleled opportunities that our country is experiencing in the face of the phenomenon of relocation of companies, reorganization of supply chains and Mexico’s commercial relations with the United States and Canada were highlighted.

In the current environment of nearshoring, investment is estimated at approximately $50 billion, of which 60% will reach the manufacturing industry, and to achieve this capitalization, governments and private initiative must catalyze investment.

In this regard, Luis Manuel Hernandez, President of Index Nacional, noted that manufacturing exports are one of the engines of the national economy, since 62% of our country’s trade is generated by manufacturing companies, creating one fifth of formal employment. in Mexico. 70% of this production is consumed by the United States.

At least 60% of the investment projected in Mexico due to companies relocating will come into the country. through the manufacturing industry. In addition, the export of industrial products is one of the engines of the national economy.

At the event, Javier Pozas, a representative of the International Finance Corporation, suggested that, attracted by nearshoring, more than 200 companies from Asia, the United States and Eastern Europe will move to Mexico in the next 3 years.

“Nearshoring could be a turning point in Mexico’s development, with more than 200 companies planning to relocate to the country,” said a World Bank finance official.

Business relocation is estimated to generate an additional US$33 billion in exports and increase annual GDP growth rates by at least 1.2 percentage points over the next 4 to 6 years.

“Some of the observed impacts (of nearshoring) are significant growth in gross domestic product in 2022, an influx of new investment from nearshoring companies of $20 billion, and leakage estimated at nearly $30 billion last year. – he pointed out.

For her part, Monica Flores, president of ManpowerGroup Latam, noted that Mexico needs to prepare for the availability of human capital needed for nearshoring, and that this implies a demand for 1 to 3.5 million jobs in the next five years.

“Nearshoring is a unique window of opportunity not only because of the economic dynamics, but also because of the number of formal jobs that will be created (…) We need to work on short training and quick certification so that people can know today what will be needed Tomorrow; and formalize the issue of vocational practice so that young people can work while studying and gain those hours of experience,” he said.

Participating in the National Index convention in Mexico City, Flores stated that it is necessary to promote the use of English and dual education throughout the country, which has been successful in several countries; while being clear about what skills and knowledge will be required by companies with new investments.

The truth is that the export manufacturing sector is key to foreign investment and pumps $500 million into the local market every day. Index companies create nearly 3.2 million jobs and export $613 million per day.

This industry generates 61% of Mexico’s exports, 18% of the national GDP and 20% of formal employment, so INDEX is a key player in nearshoring, with an estimated $48 billion coming in, of which 63% will be focused on manufacturing.

Source: Aristegui Noticias

follow:
\