Mexico’s currency value rises as nearshoring improves competitiveness16/05/2023
As it’s been noticeable for several months, nearshoring is significantly affecting logistics and economic dynamics due to the relocation of manufacturing and production processes. However, aside from these consequences, it is a trend that can also alter the local indicators for different countries.
Mexico can serve as an example. It is one of the countries worldwide that has benefited the most and is attracting companies from various sectors. Nearshoring to Mexico is gradually elevating industrial activities to a new level, enhancing competitiveness.
This situation positions the country favorably to receive new investors who seek to improve their profits by establishing production operations close to their target markets. In the long term, the workforce will acquire new capabilities that will enhance their professional opportunities. The increased competitiveness also resulted in a higher value for the Mexican currency and increased purchasing power.
Recently, the value of the Mexican Peso has been rising, reaching its highest value in years with an exchange rate of less than 18 MXN for 1 US Dollar. This purchasing power improvement attracts foreign enterprises to establish industrial clusters in various country regions. For instance, according to Wolfgang Dold, the German ambassador in Mexico, the automotive cluster in Bajio is considered the most attractive area for nearshoring, along with the aerospace cluster in Queretaro and the technological cluster in Monterrey.
A crucial advantage: reduced payments of import tariffs
Being part of the T-MEC free trade agreement with Canada and the United States significantly benefits Mexico, a significant reason for attracting foreign investors. Marcelo Ebrard, acting as a government spokesperson, stated in February that nearly 400 foreign enterprises are interested in establishing operations in the country, a sentiment echoed by the Mexican Association of Industrial Parks.
Nearshoring to Mexico is undoubtedly improving the country's economy and industrial activities. The Inter-American Development Bank expects a US $35,000 million income from exporting manufactured goods and various services.
This dynamic has reduced the availability of industrial spaces in the industrial parks in Mexico, which is the area of expertise for Frontier Industrial. We offer industrial land for sale and industrial buildings for lease in the country's most important areas. Contact us if you want to start or expand your activities in Mexico.