Factors Favoring Nearshoring Between Mexico and the U.S.
Mexico is an extremely attractive territory for the relocation of production chains, thanks to its proximity to one of the world's main markets: the United States.
Mexican manufacturing has a solid track record in exporting products from the automotive industry, machinery in general and industrial equipment, to professional, scientific, and control instruments. And about 80% of Mexican products are exported to the U.S. In addition, thanks to the USMCA, the country has facilities to transport products to this territory.
Despite China’s competitiveness in the manufacturing market with its globally famous cheap labor costs, things are starting to change. Minimum wage rates are starting to increase all over Asia, and China is not an exception.
Banxico has revealed in a report that 16% of companies nationwide reported increases in demand for their products or in foreign direct investment as a result of nearshoring in the last twelve months.
What is the reason for this phenomenon and what steps can be taken to make the best use of the current economic situation?