Mexican industry

Monterrey leads nearshoring to Mexico investments due to manufacturing

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According to Colliers' Industrial Market Monterrey 4Q 2023 report, Monterrey remains a top region for receiving foreign investments, primarily driven by activities related to nearshoring to Mexico.

Nuevo Leon, the state in which Monterrey is located, secured resources totaling US $11,417 million, constituting nearly 38% of the total foreign direct investment in Mexico throughout 2023, as detailed by Reforma.

Furthermore, the resources acquired by the region for manufacturing activities represent 76% of the foreign investment directed towards manufacturing in Mexico in 2023, encompassing 203 new industrial projects in the state, including 104 new ventures.

The region's appeal to foreign enterprises looking to establish operations near the United States market is evident in the constructing of almost 200 new industrial facilities in the state, expected to be completed by the end of the current year and 2025, as El Economista Journal reports. 

According to Francisco Tijerina, Business Development Director for Escala, a specialized construction management firm cited by the newspaper, industrial activities in the state contribute to low vacancy rates for industrial buildings, projected to decrease from nearly 1.9% in 2023 to 1% in 2024. 


Automotive and electronic devices, critical  industries in nearshoring to Mexico investments attraction

Key industries in nearshoring to Mexico investments attraction are automotive and electronic device manufacturing, driven by the announcement of Tesla's Gigafactory construction.

The primary foreign investors in the Northern entity’s industrial spaces are the United States, which holds 30% of the buildings, and China, which has 26%. 


Top challenges in attracting further investment

Top challenges in attracting further investment include the energy supply infrastructure, which remains a significant hurdle for increasing foreign investment in the state due to nearshoring and enterprise relocation to Mexico.

“These are substantial volumes of energy that the state is unable to provide currently. If this issue is not addressed, it will impede the arrival of companies. Additionally, Nuevo Leon continues to face water scarcity. Until alternative water supplies are secured, the problem will persist,” states Tijerina.


Significant growth persists in the Northern region due to technology

Monterrey has shown industrial building availability rates below 1% due to the activity in the region. According to the real estate firm Newmark, the region offers competitive advantages such as cheap workforce costs, which makes Monterrey one of the most dynamic cities in the country.

The firm highlights that foreign companies are looking to open operations in Mexico due to the availability of a long-term workforce with plenty of young, skilled workers. The high concentration of population in urban centers is also an advantage for Mexican cities, including Monterrey. 

Nearshoring in Mexico has invigorated the production of home appliances and the technology sector. With its skilled labor force and proximity to the United States market, Monterrey has become a magnet for foreign companies aiming to distribute their products within the United States. 

This trend drives the demand for more industrial facilities. According to El Financiero Journal and Mexico Business News, Monterrey is the second region in Mexico for industrial construction, following the Mexico City Metropolitan Area. 

Nearshoring to Mexico is set to continue attracting foreign companies and foreign investment from enterprises looking to establish operations in Mexico. If it’s your case, Frontier Industrial can help you with industrial land for sale and industrial buildings for rent in the central industrial regions of the country. Please contact us to develop your project and ask for our Build-to-Suit developments.