The future of Mexico’s industrial market hinges on developing productive linkages that capitalize on the potential of nearshoring to generate sustainable economic growth.

According to Dr. César Salazar López, an expert in economic growth and labor markets at the Institute of Economic Research at UNAM, a productive linkage involves the strategic integration and coordination among industries, optimizing every stage of the production process—from raw materials to the final product—to boost added value and competitiveness across the entire supply chain.

“Unlike development poles, which are geographic regions where strategic economic activities are concentrated to attract investment, productive linkages focus on connecting and strengthening collaboration between industries regardless of location, to boost local demand and reinforce the economy as a whole,” he explained in an interview with SiiLA REsource.

However, the development of these linkages faces several national challenges. Salazar highlights the lack of resources, infrastructure, and essential services necessary for industrial operations, such as water, electricity, security, connectivity, skilled labor, and land with the appropriate zoning, along with the absence of an industrial policy that fosters the creation of business synergies.

“In Mexico, the challenge is not just attracting foreign investment but ensuring that local companies can effectively integrate into value chains. This requires significant infrastructure improvements but also in the capacity of companies to compete and collaborate within these linkages,” he explained.

This scenario raises a key question: How can Mexico boost these productive linkages?

Dr. Salazar proposes a strategy based on public policy. “It is essential to implement tax incentives to stimulate investment in key sectors and strengthen workforce education and training,” he suggested. “Public spending should focus on creating industrial clusters where companies can collaborate and mutually benefit. Suppose public debt and deficits are managed properly. In that case, they can finance projects that generate economic and social returns, turning productive linkages into a key tool for driving the economy and improving public finances in the medium and long term.”

Real Estate Impact and Social Development

According to data from SiiLA, between the second quarter of 2023 and 2024, Mexico’s industrial real estate market grew by about 8%, adding over 6.3 million square meters of gross leasable area. This growth was driven by demand from 38 productive sectors, with the automotive, capital goods, electronics, and transportation & logistics sectors together accounting for 54% of total absorptions.

Productive linkages could accelerate growth and improve the performance of the industrial real estate market by increasing demand for spaces and promoting the development of new industrial parks.

In this regard, Dr. Salazar noted that in Mexico, where a significant portion of foreign investment is reinvested in the country, “nearshoring is not just about attracting foreign investment but about creating the conditions for those investments to stay, grow, and connect with the local economy.” This requires specific public-private actions, such as joint investment in infrastructure projects and the establishment of policies that encourage the reinvestment of profits, creating a virtuous cycle where more investment drives greater demand for infrastructure, leading to further economic growth.

However, the UNAM academic emphasized that for productive linkages to generate real added value, “it is crucial that economic growth translates into tangible social benefits,” such as the creation of skilled jobs that increase the purchasing power of the economically active population and the strengthening of the domestic market, “which not only reduces dependence on foreign markets but also promotes more equitable, inclusive, and sustainable development.”

Mexico has the opportunity to transform its economy through these linkages, but this requires an industrial and fiscal policy that goes beyond merely attracting investment. As Dr. Salazar concludes, “The key is to strengthen our productive capacities and create an environment where economic growth benefits everyone.”

For more insights and perspectives on Mexico's industrial real estate market, explore SiiLA REsource or contact us at contacto@siila.com.mx.