Mexico, an Investment Magnet | Article by David Ordaz

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David Ordaz

At least in the last two years, much has been written about business relocationsupply chain disruptions and the potential for attracting investments that we have in our country. In fact, the next six years will be hook for Mexico, taking advantage of the current fashion phenomenon that coastal installationwhile such aspects as time how long it will take for companies to relocate, as well as lower operating and production costs, which will increase their ability to compete with countries such as Singapore, Taiwan And Vietnamamong others.

A few hours ago, the Ministry of Economy published a report Public Investment Announcementswhere it turns out that in the month of July intentions from foreign investment directly $2.571 millionwhich totals $48,035 million for the entire year.

This amount corresponds to the total amount 166 projectswhich together will give at least 75,481 jobs for the country.

“The private sector is reported to have made 166 public announcements with expected investments of US$48,035 million, which is in addition to the US$110,744 million reported in 2023 (…) this scenario confirms the confidence of businessmen to continue investing and expanding their companies in the country,” he explained. Undersecretariat for Foreign Trade.

Among the most chosen one will appear in the first half of 2024 investments such as FEMSA ($9,965 million); Amazon ($4,963 million); DHL Supply Chain ($4 billion); Mercado Libre ($2,450 million); Walmart ($2,133 million); Engie ($2,000 million) and Ternium ($1,945 million), which complement projects such as Tango Solar ($1,172 million); Volkswagen ($942 million), Solarever ($601 million); Sempra Infrastructure ($550 million); Sailong Group ($427 million); ELAM-FAV ($407 million); Nemak ($404 million); Unison Shanghai ($400 million) and Aspen Aerogels ($270 million).

Without a doubt, the sector manufacturer remains the main one magnet For foreign investmentwhere 53% of advertising is devoted to industries such as beverages (41%); automobiles and auto parts (15%); iron and steel and electronic components. It should be noted that although the automobile sector is the second industry with the largest amount of foreign direct investment, it is this sector that generates the largest amount of employment: 42% of the total volume of expectations and the creation of 31 832 new positions from Job.

At the beginning of the year, various business organizations such as the National Council of the Maquiladora and Export Manufacturing Industry (Index), the Business Coordinating Council (CCE) and the Confederation of Chambers of Industry (Concamin) agreed that if the trend coastal installation May be double the inflow of foreign investment And economic growth in the coming years.

In fact, the export manufacturing industry is expected to use potential through IMMEX programs to 100 billion dollars So let’s remember that in the coming years, at the end of 2023, only export goods under these programs exceeded 220 billion dollars, which confirms the strength of this sector in our country. To this should be added 3.3 million. official work and direct taxes generated by the industry, which accounts for 18% of branches Mexican Institute of Social Security (IMSS) coming from 6,440 IMMEX enterprises, INEGI reports.

Among the most representative announcements is a joint project between Mota-Engil and Duro Felguerawith an investment of $1.200 million in construction Fertilizer plant in Veracruz. Also, an investment of $196 million in Queretarofrom an American company Mars Petcairededicated to the production of animal feed or investments of the South Korean company Harman $115 million for auto parts production.

In terms of geographic distribution of investment, 74% is concentrated in 15 states, with 54,808 new jobs expected to be created. The top spot is occupied by Queretaro with $6.886 million, followed by State of Mexico with $4.692 million and is in third place Nuevo Leon with $4.159 million. Fourth and fifth places are occupied by Puebla and Coahuilawhich registered investment announcements worth $2,651 million and $2,138 million, respectively, in the first seven months of the year.

Second half of the year

One scenario to consider is that in the second half of the year elections V USAwhere Mexico has established itself as the main partner with business bilateral superior 800,000 million dollars last year, in addition to the domestic market of 130 million people.

In fact, more and more business leaders in Mexico believe that one of the problems that needs to be addressed is movingthis is a creation skilled labor and stop at the same time departure of workers who turn to other countries in search of better wages.

For various analysts the question control This a very important obstacle for investment, as low legal certainty prevents companies from investing unless long-term guarantees are provided.

According to the investment bank UBSEven under the current high interest rate scenario, the Mexican economy has maintained its upward revision of its 2023 forecasts, driven by Mexico’s economic recovery. private investmentrules T-MEK and pro-American tax policy. coastal installation.

Externally, and also immersed in the elections that will take place this year in the United States, in 2026 the first revision integral Treaty between Mexico, the United States and Canada (T-MEC), where Mexico, the United States and Canada will meet to conduct a “joint review” of the operation of this Treaty.

This scenario forces our country to support good relationship with its northern neighbor, as the cooling of bilateral relations will affect Mexico’s attractiveness as a tourist destination. investments And moving businesses, mainly from Asia, who will look to other countries as a destination for their operations attracting investments.