American Free Trade Agreement (NAFTA) zone—especially
in Mexico—a more desirable option.
Over the past decade, Mexico has made significant strides
toward becoming a diversified economy with a deep skill base
that offers more than just low-cost labor. Infrastructure costs—
such as electricity, water and sewer, and transportation—are
generally within 10 percent of U.S. costs. And the country has
invested in its manufacturing infrastructure and labor pool to
evolve into a more versatile producer of high-value goods, as
well as commodity products.
Mexico's proximity also offers U.S. companies substantially
more control over manufacturing quality, delivery schedules,
and intellectual property management than they have with
overseas manufacturing facilities. Beyond the transportation
cost reductions of manufacturing closer to sales, additional
cost savings can come from working with NAFTA countries
thanks to tariff waivers specific to cross-border manufacturing.
IS MEXICO SAFE?
Notwithstanding the current drug-related violence, the
foreign direct investments for huge OEM’s and other big
manufacturing companies still arriving every year, the
country’s macroeconomics are in good shape; foreign
visitors keep coming back to visit despite the unsavory news
headlines; foreign governments are actively courting trade
and commerce with Mexico; and expats living here are going
about their lives normally; and according with “Mexico
Insight,” statistics continue to show that Mexico’s levels of
general crime and violence continue to be lower than those of
most large U.S. cities.
The Bank of Mexico is responsible for collating and
publishing foreign visitor statistics. Earlier this year, the
figures showed that over 22 million foreign visitors arrived
in Mexico last year. Despite the swine-flu of 2009, the
global economic crisis, and the drug-violence, people keep
coming to Mexico. Statistics from foreign consulate records
show that the overwhelming majority of visits to Mexico are
In decades past, when Mexico’s economy was less certain and
less stable, foreign expats would often flee home in the event
of a peso crisis. Today, even with the drug-related violence
playing out, no such exodus is taking place and, furthermore,
interest in relocations to Mexico is rising (Mexico Insight).
KEY TRENDS AND MARKET OPPORTUNITIES
• The industrial markets will be dominated by investments
funds and through a new real estate investment trust
• The initial steps of the new Federal government are heading in
the right direction and we see clearly outstanding perspectives
for the future of Mexico. Starting with the approval of the
fiscal, energy and labor reforms.
• The U.S. economy is showing a new face of acceleration
and this will activate the expansion plans for some companies
with plans for Mexico.
• With almost 30 percent of Mexico’s manufacturing product
and more than one and a half million direct jobs, Mexico’s
auto industry and aerospace will continue being the leading
growing sectors of this economy.
• On a very competitive environment in the world, the decision
to acquire or build a plant in China, or Mexico, or Brazil, or
any other market, is going to be part of a long-term strategy.
• Rising Consumer Confidence = increased production =
increased demand for buildings.
• Most of the developers in Mexico are institutional and
“broker-friendy.” They pay commissions on new real estate
transactions, renewals, and future expansions.
• Mexico’s proximity to U.S. won’t soon change!