Mexican industry

Low vacancy rates boost Mexican secondary industrial markets in nearshoring vs offshoring context

9/01/2024
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Secondary Mexican industrial markets have registered an increase in their activity because of the nearshoring dynamics that boost occupancy of central locations in Northern Mexico.

In the current nearshoring vs. offshoring global context, the industrial spaces' low vacancy rates in places such as Tijuana, Ciudad Juarez, and Saltillo, have driven the enhancement of activities in Mexicali, San Luis Rio Colorado, Chihuahua, Monclova, Nava, and La Laguna, in Baja California, Chihuahua, Saltillo, and Coahuila states.

With a national vacancy rate under 2%, the Mexican industrial market foresight ways to keep the nearshoring activities flowing by boosting the dynamics of not-so-relevant locations, which can be used to support the trend and keep the country among the leading global nearshoring production centers.

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This also includes Mexico City, where the low vacancy rates have taken enterprises to consider Toluca and Puebla as options for developing different activities.

In the Bajio region, where Guadalajara, Guanajuato, and Queretaro are the main locations, San Luis Potosi and Aguascalientes use their industrial experience to attract investments and boost their relevance.

 

Main challenges to boost production activities in nearshoring vs. offshoring dynamics

Although the industrial space demand grows in different Mexican regions, many areas face important challenges to guarantee the optimal conditions for enterprises to develop their activities: water supply has been a crucial factor for enhancing and keeping Monterrey, in Nuevo Leon, between the most important industrial markets of the country.

 

>> You might also want to know: Key factors for Mexico to keep at the top of the nearshoring trend <<

 

For southern regions, infrastructure, and electric energy supply are vital for boosting enterprises’ attraction. According to spokespersons such as Erik Brunet from Newmark, energy supply is also crucial for establishing the recent-growing markets because of the need to increase the volume of the activities.

Workforce availability is critical for attracting investment in the current nearshoring vs. offshoring global context, because technical manufacturing processes require people with minimum specific capabilities, such as those of the automotive industry or home appliances manufacturing assemblers.      

 

>> You might also be interested: Nearshoring to drive the construction of 8 million
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The manufacturing industry is a factor in investment attraction

According to Giovanni D’Agostino, Newmark’s regional director for Latin America, Mexico has registered a rise in investment in manufacturing activities. In 2023, the manufacturing investment reached 54% of the Direct Foreign Investment, while in 2022, it was 34%.

D’Agostino, also Newmark President for Mexico, explains that nearshoring is vital for the growth in industrial activities and space absorption for manufacturing enterprises, which have different nodes across locations in northern Mexico due to the proximity to the United States border.

 

>> You might also want to know: Key industries driving US-Mexico trade due to nearshoring <<

 

In a nearshoring vs. offshoring global context, Mexico surges as one of the most important markets for relocating activities. This trend proves that developing and providing industrial spaces will be crucial for keeping the country’s growth.

As an industrial land and buildings provider with experience in Build-to-Suit projects, Frontier Industrial can offer these services. Feel free to contact us and develop your project if relocating activities is your company’s goal.

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