Collaboration, Infrastructure, and Trust Conditions in the Industrial Sector: Keys to Leveraging Nearshoring in Mexico

Nearshoring holds significant potential to strengthen Mexico's economy further by encouraging foreign investment and local job creation. Moreover, by bringing production closer to the United States and Canada markets, Mexico becomes a strategic partner for companies seeking to reduce logistical costs and shorten delivery times. However, the country must continue investing in infrastructure, technology, and workforce training to fully leverage the opportunities offered by nearshoring and ensure sustainable long-term development. Additionally, addressing security, regulation, and competitiveness challenges is essential to maintain its position as an attractive destination for manufacturing and service industries.

According to Ari Cassab Petit, President of the Mexican Entrepreneurs Association (AEM) in Mexico City, there are three critical points that Mexico must address to turn nearshoring into a genuine growth opportunity. Firstly, the collaboration between industries and the government to design and pursue common objectives. Secondly, creating trust conditions within the industrial sector. And thirdly, public and private investment in short- and medium-term infrastructure.
Regarding the latter point, Cassab Petit has mentioned that it is one of the critical factors to make the most of nearshoring. This is essential to strengthen Mexico's position as an attractive destination for foreign investment, meet the needs of businesses in the country, generate employment, and create new business opportunities in northern and southern Mexico.

Infrastructure: A Solid Foundation for Development in Mexico

Cassab Petit points out that this year, Mexico has attracted investments valued between $35 and $37 billion. This economic influx has been reflected in various productive sectors and the commercial real estate markets. Data from SiiLA indicates that in just the first nine months of 2023, 180 domestic and foreign companies ventured into the Mexican industrial market, absorbing over 1.5 million square meters.

Among the crucial infrastructures to sustain and increase investments in Mexico, communication & transportation stand out, including roads and railways, as well as those in the energy and essential services sectors, such as water.

In this regard, the AEM representative has emphasized that these infrastructures will be indispensable to creating efficient and sustainable supply chains capable of reducing operating costs, maximizing productivity, and minimizing environmental impact. On the one hand, there is an urgent need to better connect the northern and southern regions of Mexico, and on the other hand, it is essential to consolidate projects like the interoceanic corridor, which involves the construction of roads, railways, and possibly port facilities, with the potential to facilitate the movement of cargo from the Gulf of Mexico ports to those on the Pacific Ocean.

In the case of the energy sector, it is essential to invest in cleaner and more efficient energy sources to boost production and reduce reliance on non-renewable sources. This is of utmost importance for industries such as vehicles and parts, which, according to SiiLA, represent 50% of the space occupied in the manufacturing sector and 27% of the industrial space at the national level.

Energy diversification and implementing sustainable technologies are essential to ensure a reliable and affordable supply of vital resources in industrial production while reducing the environmental footprint.

Mexico can potentially become a strategic partner for companies worldwide, but success depends on its ability to overcome these challenges and continue strengthening its position in the global market.

For more information on Mexico's industrial real estate sector, explore SiiLA REsource or contact us at contacto@siila.com.mx.