The forgotten states of investing; few or no ads in 11 entities

From January 2023 to September of this year, there is a mapping of 587 investment announcements, which means that these 11 entities barely add up to 18 of these announcements.

By state, Baja California Sur registers zero announcements, Campeche (1), Chiapas (1), Guerrero (1), Morelos (1), Nayarit (1), Oaxaca (2), Quintana Roo (2), Colima (3) , Sinaloa (3) and Tlaxcala (3).

This reflects that nearshoring is not reaching everyone and the Foreign investment interest remains concentrated in entities such as Nuevo León, which reports 93 ads.

Coahuila and Querétaro are also the other side of the coin, with 77 and 68 announcements, respectively. These three states alone represent 41% of the total.

The Mexican Institute for Competitiveness (IMCO) identifies several of the states that have a low number of ads as unattractive for nearshoring, but places others as among the best evaluated.

Entities face challenges

Baja California Sur, which registers zero announcements, is positioned by IMCO in 10th place in its evaluation of the best and worst evaluated states for the attraction of nearshoring, and it also highlights that it occupies 2nd place in its 2024 State Competitiveness Index (ICE). .

This appeal is not seen in investment advertisements. In the accumulated Foreign Direct Investment (FDI) from 2006 to June 2024, the state represents 2% of the total, above entities such as Hidalgo or Tabasco, which do have announcements.

But this can be explained because within the indicators that IMCO rates, there are some with low or very low competitiveness that are related to what nearshoring most demands.

For example, the level of competitiveness of Baja California Sur in energy intensity of the economy is very low and in merchandise exports and economic diversification it is low.

In addition, the cost of labor is the highest, with an average income of 14,718 pesos per month.

Sinaloa ranks 11th in the ICE and 9th in best performance to attract nearshoring, its weakness is in the security part. The entity represents 1.3% of accumulated FDI.

The Autonomous University of Sinaloa also detected that the entity does not have an industrialization and infrastructure development strategy, which is why the nearshoring opportunity is being lost.

Colima is also one of the best rated by the IMCO for investment attraction, it occupies fourth place and in the ICE it is less favored with 16th place.

The weak points for Colima are also security, low economic growth, of just 1.3% on average in the last three years, and low air cargo capacity. The entity has 0.4% of FDI.

Morelos is in 7th place among the best evaluated for nearshoring attraction, but at number 26 in the ICE.

But it lacks security, with a high number of homicides and a low perception of security. The state contributes 0.9% of the accumulated FDI.

Tlaxcala is ranked 11th in the evaluation of investment attraction due to nearshoring and 26th in the ICE, in which it is not well rated in infrastructure and in the labor market, and represents 06% of FDI.

Nayarit is in 23rd place for nearshoring and 19th in the ICE, but faces low competitiveness in innovation and economy, with a very low level of patents and low exports. It contributes 0.8% of FDI.