News

BBVA Nearshoring Survey July 2023

In today’s dynamic global business landscape, staying informed about market trends and opportunities is crucial. The recent survey in collaboration with BBVA Research and the Mexican Association of Private Industrial Parks (“AMPIP”) provides vital insights into foreign investment and nearshoring trends in Mexico. This research underscores the increasing interest in Mexico among companies due to nearshoring. It also highlights key factors shaping the region’s business landscape. At Redfern Consortium Group LL (“RCG”), we believe in the strategic value of these findings. Anticipating market shifts is essential for our clients’ success. This research serves as our compass to provide tailored solutions for businesses looking to thrive in Mexico’s evolving market.

Foreign Investment and Nearshoring in Mexico (July 2023)¹

The survey aimed to quantify and anticipate the effects of nearshoring in Mexico. The results confirm:

•      Companies keen interest in operating in Mexico due to the nearshoring phenomenon and an anticipation of a greater influx of companies in the next two years.

•      To fully capitalize on this opportunity, a shift in energy policy, improvements in the water supply, and a reduction in crime rates are imperative.

Key Survey Highlights:

•      Companies' decisions to nearshore are influenced by various factors, including the outlook for domestic and foreign markets, trade conditions, and trade agreements (USMCA/CUSMA/T-MEC), as well as the existing infrastructure in terms of energy, logistics, water, and security.

•      AMPIP's industrial parks host 20% domestic companies and 80% of foreign origin, with 97% having an export-oriented profile.

•      Since the start of the trade tensions between China and the USA in 2018, Mexico has welcomed 830 new foreign tenants. These include 35% from the USA, 20% of Asian origin, and 9% from Europe. On average, this represents 207 new companies per year between 2018 and 2022.

•      During this same period, 21% of companies expanded their space within industrial parks, with only 1.4% reporting a decrease in space, indicating a positive outlook.

•      By 2025, an estimated 453 new companies are expected to establish operations in Mexico, with 20% originating from China. This anticipates an annual growth rate of 9.1% compared to the 2018-2022 period.

•      To fully leverage the opportunities presented by nearshoring, addressing limitations such as the availability of clean and competitively priced electrical energy, drainage, water supply, public security, and streamlined procedures is essential.

•      Among the AMPIP member respondents, 91% reported being affected by energy supply-related issues, while 63% faced challenges related to water supply.

RCG offers expert advisory services tailored to companies aiming to expand their operations in Mexico, whether through partial expansion (nearshoring) or establishing a complete local presence. With a profound understanding of the intricate Mexican business landscape, RCG is equipped with the necessary expertise and resources to facilitate a seamless and triumphant market entry. Our integral suite of soft-landing services includes advisory, foreign trade facilitation, human capital management, legal support, and tax guidance. Contact us to explore how RCG can be your strategic partner in your Mexican endeavors.

¹ Source: BBVA Research: Observatorio: Inversión extranjera por nearshoring, encuesta a miembros de AMPIP (10 de Julio, 2023)