The Mexican economy is picking up speed, with recent estimates from Moody's Investors Service predicting the country will end 2013 with a gross domestic product of 3.1 percent, according to The Global Post. With more U.S. industries expanding to Mexico to take advantage of the lower labor costs and high production quality, Mexico may gain additional ground as a global industry leader. As manufacturers in Mexico increase production, the national economy is set to begin expanding even faster.
Economy growing quickly
According to Reuters, industrial strength has helped the Mexican economy expand 0.45 percent each month during the first six months of 2013. Compared to 2012, economic activity rose 1.7 percent through May, despite slow downs earlier this year. Aided in part by new infrastructure proposals and the use of offshore companies, Reuters reported the industry sector saw a 1.39 percent month-on-month boost, the fastest pace for the sector since June 2012. One reason the manufacturing industry experienced strong gains is due in part from increased production pace and output as well as improved activity in construction and assembly.
The Global Post reported that although the Mexican economy slowed down in the first months of 2013, Moody's Investors Service forecasted the country's GDP will increase from the current rate of 3.1 percent to 3.5 percent beginning in 2014
"The Mexican economy has decelerated recently, but the current softness is more a product of cyclical deceleration and growth should resume toward the second half of this year and will, in fact, be stronger next year," Moody's Investors Service said, according to The Global Post.
New policies will move the country forward
Euronews recently reported that the Mexican government is looking to reform aspects of its economic policies to generate interest in expanding to the country from additional industries. According to the news source, Article 27 of the country's constitution prohibits the government from providing private sector companies concessions for oil or gas, which are both industries members of the Mexican government are looking to expand into. Mexico is already becoming a leader in renewable energy and has been utilizing the U.S.'s production of national gas and oil to fund many of its industries. Although much of the county's economic growth is due to the industry sector, many government officials reported concerns over changing areas of the Mexican constitution just to allow additional sectors to become more active in the country.
Ewell Murphy, an expert on Mexican energy law from the University of Houston Law Center, told Euronews that the ban on private company concessions is an important element of the country's use of oil and gas.
"It's like changing the ten commandments, it's a very sacred thing," Murphy said.
As more companies utilize Mexico's labor force and production capabilities, the country is set to continue expanding throughout the rest of the year. Mexico has increasingly become a hot spot for industry, and with the sector being an important piece of the country's economy, it's not set to decrease any time soon.