Investor Preferences and Regional Development in Mexico
Both domestic and foreign investors prefer regions with robust infrastructure and essential services, including healthcare facilities, education, water, and energy. These regions are crucial for attracting investment and fostering industrial growth.
Manufacturing Sector and Export-Oriented Industries
The export-oriented manufacturing sector, along with the emerging industrial relocation, is primarily concentrated in central and northern Mexico. This strategic location is due to its proximity to the United States, the world’s most significant market.
- 66% of Mexico’s exports are transported via roadways, with Laredo, Ciudad Juárez, and Mesa de Otay being the most representative crossings for container shipments to the United States.
- Currently, expansion projects are underway at Guaymas and Progreso ports in Sonora and Yucatán, respectively, to enhance international transportation capabilities.
Investment-Attracting Regions in Mexico
The Greater Mexico City area and the State of Mexico are the primary absorbers of both domestic and foreign investment, capturing 70% of foreign investment and 65% of credit from the financial system.
Querétaro, Baja California Sur, Nuevo León, and Chihuahua have successfully developed numerous industries over the years, with aerospace now experiencing significant growth. The Bajío region offers opportunities for the automotive sector, which accounts for 50% of industrial activity.
- Other key industries in Bajío include food, appliance manufacturing, and agroindustrial varieties, all with export orientation towards the United States.
Jalisco stands out for attracting substantial Foreign Direct Investment (FDI), having captured $933 million in the first half of 2021. To further bolster its appeal, the state government plans to invest $25 billion in maintaining deteriorated state roadways.
Regional Disparities and Challenges
While central and northern regions experience integration of regional markets, there is a need to expedite infrastructure, energy, and water projects for more dynamic development poles.
- Paradoxically, Nuevo León faces a water shortage, while Chiapas has excess water.
- The southern and southeastern regions lag behind in economic activity, with incomes heavily reliant on remittances from Mexican workers in the United States and federal cash transfers.
States like Puebla and San Luis Potosí have long-standing automotive industries, while Coahuila and Durango promote semiconductor development.
Baja California Sur and Quintana Roo have the highest labor incomes. However, addressing regional disparities remains a critical challenge for Mexico’s balanced development.
Key Questions and Answers
- What regions are favored by investors? Investors prefer regions with robust infrastructure and essential services, including healthcare facilities, education, water, and energy.
- Why are central and northern regions attractive for investment? These regions benefit from their proximity to the United States, the world’s most significant market, and host export-oriented manufacturing sectors.
- Which states are key absorbers of investment? The Greater Mexico City area and the State of Mexico are primary absorbers of both domestic and foreign investment.
- What industries are thriving in Mexico? The automotive sector, food, appliance manufacturing, and agroindustrial varieties are key industries with export orientation towards the United States.
- What are the regional disparities in Mexico? While central and northern regions experience integration of regional markets, southern and southeastern regions lag behind in economic activity, heavily reliant on remittances and federal cash transfers.
