The impact of nearshoring in Mexico will become evident within the next couple of years

By Manolo Pasero 

May 21, 2024

Consultant Gregorio Canales predicts that the impact of Mexico's nearshoring on statistics will become apparent in 2025 and 2026, considering the lag between investment announcements.

The trend of nearshoring, which involves relocating business operations to nearby countries, has been gaining traction in Mexico, especially in recent years. Experts familiar with the economic landscape predict that the effects of this trend will start to manifest in statistical data around 2025 and 2026.

Nearshoring Trend: Mexico has become a preferred nearshoring destination for companies, particularly those based in the United States. This trend is largely driven by factors such as lower labor costs, proximity to the U.S. market, and the establishment of trade agreements like the USMCA (United States-Mexico-Canada Agreement), which replaced NAFTA.

Investment Announcements: When companies decide to nearshore their operations, it often involves significant investment in infrastructure, facilities, and human resources. These decisions are not made overnight; they involve careful planning, negotiations, and logistics. Typically, there is a lag between the announcement of these investments and their actual implementation and impact on the economy.

Economic Impact Lag: Experts suggest that this lag in investment announcements and their impact on the economy will be reflected in statistical data around 2025 and 2026. This means that while companies may have announced their nearshoring plans earlier, the full economic effects, such as job creation, GDP growth, and trade balances, will take some time to materialize.

Job Creation and Economic Growth: Nearshoring initiatives are expected to create employment opportunities in Mexico, particularly in sectors like manufacturing, technology, and services. This influx of jobs can contribute to economic growth, stimulate local economies, and potentially reduce unemployment rates.

Supply Chain Resilience: Nearshoring also offers benefits in terms of supply chain resilience, as it reduces dependence on distant suppliers and mitigates risks associated with disruptions in global trade or geopolitical tensions.

Policy Implications: The anticipated impact of nearshoring on Mexico's economy underscores the importance of policy measures to support and sustain this trend. Governments may need to implement initiatives to improve infrastructure, streamline regulatory processes, and invest in education and workforce development to ensure the competitiveness of the nearshoring sector.

    Overall, the prediction by nearshoring experts highlights the evolving dynamics of Mexico's economic landscape and the expected role of nearshoring in shaping its future trajectory. As investments materialize and operations are established, the true extent of nearshoring's impact on Mexico's economy will gradually become evident in the statistical data over the coming years.

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