One in 5 Mexican companies report a positive impact from nearshoring

According to a Bank of Mexico (Banxico) analysis, the phenomenon of chain relocation or nearshoring as well as the strength of demand have recently had a favorable impact on one out of every five Mexican enterprises.

The central bank also discovered that 9.3% of businesses countrywide indicate a boost in output, sales, or investment as a result of value chains moving from other nations to Mexico in its April–June 2023 indicate on Regional Economies.

Manufacturing firms indicate a rise in planned investment of 14.9%, investment to enhance capacity of 11.9%, value of sales agreements with foreign firms of 11.8%, production or operation of 11.6%, and employee count of 9.7%.

Nearshoring is a phenomenon that consists of relocating production chains from other countries, particularly in Asia, to regions closer to major markets, as in the case of Mexico and the United States.

The trend has become more acute in the wake of the Covid-19 pandemic and the trade war between China and the United States.

Mexico is one of the countries that has benefited the most, and Santander Bank has estimated that nearshoring could drive an additional 8% growth in the country’s gross domestic product (GDP) over the next six years.