News, Insights and Best Practices for Manufacturing in Mexico

Employment on the rise in Mexico

16 Jun 2014

Category: Aerospace Manufacturing, Automotive Manufacturing, Labor & Economics

Mexico will have steady hiring in the third quarter this year, according to a report by ManpowerGroup. Out of the 4,816 Mexican employers who responded to the survey, 22 percent plan to hire in Q3.

The staffing company has found that hiring in the construction and services sectors are among the most optimistic forecasts. In both sectors, 16 percent of employers or more plan to hire more workers. Slightly below this number, 14 percent of those in the manufacturing business plan to add more employees. The western part of Mexico has the most optimistic outlook among regions, with 44 percent of employers planning to increase their payroll. 

This increased hiring indicates that Mexico's economy is growing stronger.

The forecasts for the West and Southeast regions are among the best in the 11 years that Manpower has surveyed the region.

"Fueling employer confidence in the region are upbeat forecasts reported in the manufacture, services and construction industry sectors," said Monica Flores, CEO of ManpowerGroup for Latin America. "Technology companies are also planning to invest in hi-tech product manufacturing. Other large companies specializing in food service are growing in the region, and are also expected to generate new employment opportunities." 

Capitalizing on Mexican economic gains
Antonio Garza, a former ambassador to Mexico, wrote in a recent op-ed for Alcalde, a magazine for the alumni of the University of Texas, that the state needs to change how it runs its business and education sectors as Mexico begins to become a major global player in the manufacturing world.

Garza cites Mexico's reforms to the energy sector that will reshape its economy and make it stronger. Other reforms that are to happen in the future, according to Garza, include creating institutions, developing complex regulations, and putting in place many new procedures and processes.

Additionally, Mexico has established trade routes through the U.S. that take advantage of the North American Free Trade Agreement, which eliminates tariffs on virtually all products that move between the U.S., Mexico and Canada. According to Garza, the agreement has turned the whole of North America into a major manufacturing center.

Texas will strongly benefit from Mexico's increasing prominence on the world stage. In order to further these benefits, Texas will need to make education its No. 1 priority, Garza wrote. This will enable Texas to best align its talents with Mexico's talents, and ensure that everyone in Texas can take part in the new economy in which Mexico and Texas coexist and work together on a much deeper level than before. Texas will need educated workers to unite with the Mexican labor force.

Mexico has already created engineers and technicians, and these workers strongly benefit Mexico's automotive and aeronautical manufacturing sector. Texas must follow through and produce skilled labor on its own in order to better work with its neighbor.

"Texas is engaged in a national, regional and global competition for innovation and competitive advantage," Garza wrote. "More than ever, economic progress and social advancement depend on education and research. Only by focusing on these issues will we be able to marry the very best of what's transpiring in Mexico with the very best of what's possible in Texas."

Mexico's future economy
With hiring in Mexico picking up, and with Texas poised to become a major intermediary between Mexico and the rest of the U.S., it is a great time for U.S. companies to begin expanding to Mexico, in particular while the economy is still in a position where such a move would be easy to do. By hiring a Mexico shelter company, the transition to operating in Mexico would be easy and effective.

Currently, according to Reuters, Mexican Minister of Finance Luis Videgaray believes that the gross domestic product of Mexico (2.7 percent) implies growth will speed up during the rest of the year. This could mean that it will become more expensive to move to Mexico in the future.

 

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