Economic Weakness Reflects in Industrial Production Across Mexican Entities
At the start of 2025, Mexico’s economic fragility is mirrored in the industrial activities of its federal entities, raising concerns among numerous subnational governments.
According to seasonally adjusted data from the National Institute of Statistics and Geography (INEGI), 19 out of the 32 entities that make up Mexico experienced monthly reductions in their industrial production during January 2025.
Quintana Roo and Chiapas Suffer the Most
Quintana Roo saw the most significant drop, with a 42.11% decline, impacted by the completion of the Tren Maya (the state hosts most of its segments) and the International Airport in Tulum.
Chiapas followed with an 11.09% decrease, also affected by the Tren Maya’s conclusion.
Coahuila and Guanajuato Affected by Trade Uncertainty
Coahuila and Guanajuato, known for their high manufacturing integration, were hit by uncertainty from Donald Trump’s tariff policy and the weak industrial performance in the US at the start of the year.
Tabasco’s Industrial Activity Declines Consecutively
Tabasco experienced a consecutive 3.22% industrial decline for two months, influenced by the Tren Maya’s completion, low crude oil production (Tabasco’s petroleum-oriented vocation), and the delayed operation of the Dos Bocas refinery.
Frontier States Also Affected
Tamaulipas, Chihuahua, Nuevo León, and the State of Mexico—known for its industrial prowess—also suffered from reduced manufacturing in the US and early shipments to the US due to tariff uncertainty following Trump’s presidential win.
Identifying Industrial Crisis
Nuevo León and Sinaloa have experienced the most consecutive monthly declines, with 6 and 4 months respectively. Nuevo León’s situation is tied to US matters, while Sinaloa’s industrial decline stems mainly from public insecurity, causing temporary or total business closures.
Rising Industrial Activity in Some States
Puebla Leads with Automotive Sector Growth
Among the 13 entities with monthly industrial growth, Puebla—with an automotive focus—led the way with a 12.29% increase.
San Luis Potosí followed with a 10.81% monthly variation, driven mainly by the automotive industry.
Oaxaca completed the top three with a 3.18% increase, fueled by the construction of the Interoceanic Corridor.
Other Notable Increases
Tlaxcala, Aguascalientes, Mexico City, Morelos, and Querétaro also saw monthly industrial growth exceeding 1%.
New Commercial Order and Future Outlook
Banorte anticipates that volatility driven by the new commercial order will continue to affect Mexican industry in the short term. However, their baseline scenario expects these adjustments to ease and tariffs to remain intermittent.
The focus on Mexico’s trade position with the US remains crucial for the manufacturing sector, with the federal government aiming to secure a more favorable tariff rate compared to other countries.
Positive elements for industrial reactivation in the remaining year include increased government spending on public works as part of Mexico’s Plan, higher national content in government purchases, and greater participation in mixed investment schemes for infrastructure projects.
