Mexico's Aerospace Industry Drives Economic Growth and Foreign Investment with Rapid Expansion

Mexico's aerospace industry is driving economic growth and attracting foreign capital as companies rapidly expand and invest in the sector. Despite the pandemic-induced slowdown, the aerospace sector has quickly bounced back, with an average annual investment of nearly $170 million over the last two decades, according to the Secretariat of Economy. As of the third quarter of 2022, foreign direct investment (FDI) exceeded $198 million.

As foreign investment in the Mexican aerospace sector continues to surge, the physical expansion of aerospace companies in the country has been significantly impacted. Real estate analytics firm SiiLA's reports that since 2020, there has been an 82% surge in the industrial space occupied by the aeronautic industry nationwide. This growth is largely driven by the increased production destined for the United States, which is the world's largest consumer market. The influx of new companies and expansion of existing ones has resulted in high absorption levels of industrial space.

Mexico's lower production costs have made it an attractive location for companies looking to do business in the United States, as well as for North American companies looking to do business in Mexico. Consequently, it's not surprising that most investments in Mexico's aerospace sector come from the United States, Canada, and France. According to SiiLA Market Analytics, as of 2022, companies from these countries occupy 88% of the industrial spaces in the national aerospace sector, including the French Safran Group in the Queretaro Industrial Park, the American EnerSys in the Pacifico III Industrial Park (Baja California), or the Canadian Bombardier in the Aerospace Industrial Park (Queretaro). Experts predict that Mexico's success in the sector will pave the way for greater investment and innovation in other advanced manufacturing industries.

The aerospace industry is concentrated in the Northern and Bajio regions of Mexico, with the industrial markets of Queretaro, Mexicali, and Tijuana accounting for almost 87% of the gross leasable area (GLA) occupied by aerospace companies, according to SiiLA Market Analytics. Queretaro, Baja California, and Chihuahua have been the Mexican states that have received the highest levels of FDI from the aerospace industry, with Queretaro receiving $980 million, Baja California receiving $797 million, and Chihuahua receiving $755 million in the last two decades.

The aerospace sector offers positive short- and medium-term investment prospects, and SiiLA Market Analytics will continue to monitor this and other sectors of the commercial real estate market in Mexico. For more information, visit SiiLA Market Analytics or contact us at contacto@siila.com.mx.