Mexico has reached the highest foreign direct investment in 20 years

by Advance Real Estate 11 de July, 2023 993 Views

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Last year, Mexico broke a new record for foreign direct investment (FDI), translating to a possible economic recovery persisting through 2023.

This growth lets us envision forging long-lasting economic relations with other countries, with several industries expanding.

Foreign investment in Mexico

Lately, many foreign investors have participated in domestic companies’ equity. In fact, the Mexican Secretariat of Economy¹ stated, as of the third quarter of 2022, a preliminary FDI of US$32,147.4 was registered.

This figure marked multiple milestones as it exceeded the 2021 amount for the same period (US$ 24,831.70). Furthermore, last years third quarter FDI was the highest recorded since 1999.

But where does FDI derive from?

According to the Secretariat of Economy², the following five countries are the largest investor in the activities covered by the law:

The United States with US$309,903.
Spain with US$80,651.
Canada with US$50,124.
Japan with US$30,578.
Germany with US$29,940.

The foreign direct investment of these countries flows to different industries worth examining.

Foreign direct investment by industry

FDI flows concentrate on the following three sectors:

1. Manufacturing sector

This industry in Mexico accounts for up to 36.3% of the FDI. This is due to the growing nearshoring trend as it streamlines logistics, strengthens the supply chain, and, therefore, the commercial relation between Mexico and the United States.

Moreover, Dr. Luz María de la Mora, former Assistant Secretary of Foreign Trade, foresees many³ companies joining the supply chains of the automotive, battery, and auto parts markets.

2. Transportation sector

Heavily tied to nearshoring, 14.5% of foreign direct investment is destined for the transportation industry.

Meanwhile, the most attractive sub-sectors for foreign investment in Mexico are services such as railroads, mail, cargo storage, and pipeline transportation⁴.

3. Mass media

News media received 13.6%, with television networks and newspaper media groups getting the largest share.

But the key factor for the two primary industries receiving FDI is industrial parks and the variety of buildings and spaces within them. They can optimize a company’s operations to attract even more foreign investors.

Industrial spaces as an investment in Mexico

Industrial parks bring manufacturing, logistics, and transport industries close to essential routes, which persuades them to participate in nearshoring. At the same time, they get an increased rate of business opportunities by associating with other companies in the same line of business.

Additionally, settling in an industrial zone such as the North and the Bajio corridor, your company can benefit from access to cutting-edge facilities. In the end, by converging production plants, assembly centers, and loading and unloading centers for vehicles, operations are improved.

When companies locate in an industrial zone, they grow on the right track. Meet Advance Real Estate and find a specialized ally in industrial building leasing in the most strategic areas of Mexico.

INFORMATION SOURCES

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Advance Real Estate

Advance is a leading company in the acquisition, leasing and operation of industrial and logistics assets, with presence in 12 cities within Mexico and a portfolio of 11.5 million sf of industrial space.

informes@advance-realestate.com

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