What will be the next stage of nearshoring in Mexico?
S&P says that the next stage of nearshoring in Mexico will be more “difficult”, since it will involve attracting more foreign manufacturers, Mexico's Foreign Direct Investment (FDI) data indicates that the number of manufacturing companies that have relocated in the country it has been relatively small.
“Most of the FDI has been from companies that already had operations in the country by reinvesting their profits.”
For more foreign companies to come to Mexico, a sufficient supply of clean energy, water and labor is required to meet the growing needs of production, security and a stable trade policy.
The rating agency predicts that in the energy sector the sector will continue to be highly centralized and the participation of the private sector will be limited.
In water supply, it projects that up to 20 of the country's 32 states will face high exposure to water stress in the coming years.
In human capital, it states that the manufacturing sector already employs more than 16% of the total workforce and companies say they face difficulties in meeting some of their needs for more specialized labor.
In security, he points out that the crime rate in Mexico remains high, which affects business activity.
Finally, as far as industrial policy is concerned, it is not expecting a significant change in the strong commercial ties between the United States and Mexico.
“There is some degree of uncertainty regarding possible changes in trade policy after the US elections on November 2. The USMCA will be reviewed in 2026.”
