News, Insights and Best Practices for Manufacturing in Mexico

Companies ready to pour investments into Mexico

31 Jul 2013

Category: Taxes & Finance

Business leaders with one eye toward the future are looking for opportunities for expansion and new places where they can grow their company. This is exactly why audit, tax, and advisory firm KPMG recently conducted its High Growth Markets Outlook Survey, which studied corporate strategy relative to geographic expansion in emerging marketers throughout the globe. According to the research, 17 percent of business executives said their company is planning to make capital investments of more than $5 million in Mexico.

Expanding to Mexico is a growing trend for manufacturing firms in the U.S. that are seeking an outsourcing alternative where they can procure affordable real estate to move some of their business processes. Industrial parks across the border are a safe, viable option for many organizations that are in the market for secure facilities, a local infrastructure supported by contractors and superior project management services.

"U.S. businesses are seeing positive momentum in the domestic economy and now appear ready to loosen their purse strings to invest in emerging and high-growth markets to fuel growth in years to come," said Mark Barnes, national leader of KPMG's U.S. High Growth Markets practice. "Not surprisingly, these businesses are honing in on vast markets with strong growth rates.

Why is Mexico a good option for expansion?
Many business leaders have high hopes for the sectors of their company in high-growth countries. In fact, 77 percent of respondents believe their firm's revenue will soar in emerging markets over the course of the next year. Mexican shelter companies can be one of the primary reasons for success during expansion because of the low costs of running business operations in the country.

Top decision-makers in the U.S. often rely on their bottom line figures when making choices. An article for CNBC stated that organizations are often best suited making investments in Mexico due to their ability to receive a higher return on their investment. Furthermore, Mexico is also the closest of the Latin Americans countries that are considered emerging markets.

"Mexico, on most industries - and we've done a fair amount of surveys on this - generally has higher margins and is more profitable than a lot of other emerging markets," Clinton Carter, director of research at Frontier Strategy Group, told the news source.

 

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