High-End Manufacturing Will Continue to Boost Mexico’s Economy

Mexico has been seeing continued growth because of its Integration with and dependence on the U.S. Market. Despite of the low oil prices, the high-end manufacturing sector will be a key driver of Mexico’s economic growth the following years.

Background of Mexico’s economic buoyancy

In the late 1980s and early 1990s, Mexico underwent a profound economic and political reorganization. The economy liberalized, culminating in the North American Free Trade Agreement. Due to that, Mexican trade became even more closely tied to the United States.

In addition to this, Mexico responded to China low wages by making more valuable products, such as automotive, aeronautical and electronic products, so if clothing exports dropped, automotive exports increased exponentially.

 X-Ray of Mexico’s manufacturing sector

Argentina, Brazil and Mexico make up more than 80 percent of Latin America’s manufacturing output and even if the first two have seen a slump in their manufacturing sectors due to both countries’ slowing economies and growing restrictions within their Mercosur trade bloc, Mexico has performed much better.

Mexico’s manufacturing output is projected to increase between 4 and 4.5 percent for 2015 and 2016 accordingly to experts and expects that the manufacturing sector could add between $20 billion and $60 billion to Mexico’s economy in the next 3 years.

To summarize, the strong performance and growth prospects of Mexico’s manufacturing sector, particularly high-end manufacturing, will continue to boost the country’s economy for years to come.

This information was sourced from Forbes and Stratfor. Click on the names to read full articles.

Comments (1)

  1. Today, With So Many Global Manufacturing Choices, Some Ask–Why manufacture in Mexico?
    Increasingly, companies are learning of the significant advantages and benefits of manufacturing in Mexico as a maquiladora versus other global locations.
    Take a look of this interesting information about the 5 Business models to start manufacturing operations in Mexico and learn why Mexico is in the loop of international manufacturers evaulating benefits, risks and liabilities of start up manufacturing operations in Mexico: http://bit.ly/1Jf3wd1

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