Posts tagged ‘foreign investment’
Analysis by Crossborder Group Finds Tijuana #1 City in North America for Medical Device Manufacturing Employment
Crossborder Group has just completed an analysis of the most-recent INEGI data for Mexico’s maquiladora/IMMEX industry — some findings of which are presented at right in our CrossborderInforma briefing (download here, or by clicking on the image [PDF, 175kb]). Beyond the fact that Mexico’s IMMEX companies are continuing their rebound from the 2008-2009 recession — ending 2010 with a respectable 1.81 million employees (9.1% growth year-over-year compared to December 2009) — several other findings stand out:
- Border states captured only 63% of the nearly 165,000 jobs created in the maquiladora/IMMEX sectors in 2010;
- Nuevo León has surpassed Baja California for second-place in terms of total IMMEX employees (despite the negative security image, Chihuahua remains in first-place); and… (more…)
The Mexican peso has reached its strongest exchange rate against the U.S. dollar since October 2008 — 12.07 pesos to US$1 — benefiting some in the domestic market, while bringing back some concerns about a “Super Peso” for those that are involved with (or depend upon) cash inflows from the United States.
As seen in the graph at right (developed by Crossborder Group and based on historic Banco de México peso exchange rate data [showing the official rate to resolve currency obligations]), the peso was last at these levels in early-October, 2008, during a time in which the peso depreciated by 20-30% from 10 pesos per US$1.
A variety of factors appear to be creating this peso-strengthening trend: a still-slow U.S. economic recovery, concerns about certain European markets (and the stability of the Euro), and the contrasting relative fiscal/economic stability in Mexico. In fact, recent efforts by the Calderon Administration to increase foreign reserves to over US$113 billion and secure a US$73 billion two-year line of credit from the IMF, while maintaining Government debt to just over 2% of GDP, will likely contribute to some continued strengthening of the peso for at least the first half of 2011.
A new Super Peso could lead to increasing costs for international visitors to Mexico, as well as a higher cost for production in the foreign-dominated IMMEX/maquiladora industry — potentially undermining some of Mexico’s competitive strength internationally. Crossborder Group will continue to track this issue throughout 2011, and can provide insights into potential impacts on your market or industry — contact us at answers[at]crossborderbusiness.com for more information.
New data from several major automotive manufacturers signals a recovery, and a shift toward expansion and increased foreign direct investment into Mexico’s automotive industry.
Mexico’s automotive sector experienced a steep decline in production and investment in 2009 due to the global economic downturn. In fact, by January of 2009, production of cars and light trucks had fallen to less than half of January 2008’s levels — a trend which continued throughout most of 2009. However, several major OEM’s have recently announced plans for production or supplier expansions in Mexico over next few years.