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Mexico beats Canada in resettlement: How does it benefit the country?

Among the American companies that made efforts to move their companies from Asia, 79% moved part of their manufacturing operations to the United States, 27% to Mexico, and 24% to Canada.

This was stated by Omar Troncoso, Kearney’s partner in Mexico Resettlement processWhen companies return to their country of origin, in this case the United States, it is a process that began two or three years ago.

After the COVID-19 pandemic, two or three years later, we are seeing a much greater trend toward bringing production back to the United States.

And with this US Reconstruction Index It reached its historical maximum in 2023, reaching a level of 196 points, higher than the 98 points recorded in 2019, before the pandemic.

Although relocation does not mean moving operations to Mexico, this process also benefits the country, as these companies need suppliers nearby, which is known as Close to the beach.

“Among CEOs considering reshoring or near reshoring, more than 85% indicated they intend to source materials and parts locally, signaling a move to bring the entire ecosystem closer together,” Troncoso said.

He explained that 25% of companies requested it Transportation of Asian suppliers Or opening branches near new locations of its manufacturing operations, and this is what Mexico is witnessing, especially in the north of the country.

The expansion of manufacturing and warehouse space is particularly noticeable in areas near the U.S.-Mexico border, but the speed at which it is happening is astonishing. “One of Mexico’s leading warehousing companies reported that its business has quadrupled in the past two years.”

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No change in the elections

Kearney’s director considered that the results of the elections in the United States and Mexico would not stop companies’ investment decisions, nor would they stop the phenomenon of corporate relocation.

He pointed out that during the Donald Trump administration, Asian imports to the American Union began to decline, so if he becomes president, this will not represent a risk.

While in Mexico, companies “actually underestimated” the effects associated with the presidential change.

It surpasses the Asian giant

The Reshoring Index also shows that in 2023, for the first time, Mexico will overtake mainland China and is now the largest exporter to the United States.

the US imports of goodsMexican manufacturing grew from $320 billion in 2019 to $402 billion in 2022 and to $422 billion in 2023, an increase of $102 billion or 32% before the COVID-19 pandemic.

While low-cost Asian countries and China saw a 14% decline in imports to the United States, Mexico and Canada recorded a 10% increase during 2023.

China’s share of imports to the United States fell to 47% in 2023, from 51% in 2022, Troncoso said.

Aileen Morales

"Beer nerd. Food fanatic. Alcohol scholar. Tv practitioner. Writer. Troublemaker. Falls down a lot."

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