News, Insights and Best Practices for Manufacturing in Mexico

Mexico sees expanding economy in second quarter

01 Aug 2014

Category: Labor & Economics, Manufacturing in Mexico

Mexico's economy grew in the second quarter, setting it up to continue developing in the last half of the year, according to The Latin American Herald Tribune. The chief driver of this change was Mexico's healthy export market, which grew by 5.4 percent. Mexico is working hard to make its manufacturing industry available for U.S. companies to take advantage of. Additionally, the  country is on an upward path of growth through its slow-but-steady approach to expansion.

Mexico's exports drive its economy
Mexico sends out much of its goods to the U.S., and many of the companies that export their products are part of the so-called maquiladora industry. Maquiladoras are specially designated factories that are permitted special tax discounts and governmental incentives, such as assistance finding labor, and in return, the companies must export all of their production outside of Mexico.

Earlier in the year, during the extreme cold weather, demand for exports from Mexico fell sharply, but they have begun to pick up, according to the source. Finance Secretariat Economic Planning Unit chief Ernesto Revilla reported that growth is following the U.S. economy - as it usually does in Mexico, since the two economies are closely linked through trade ties - and will "have growth significantly above the first [quarter]."

"This is good news for the Mexican economy because via exports, higher manufacturing production and, especially, the public spending figures we are seeing, we would have to expect more dynamic second, third and fourth quarters," said Revilla, according to The Latin American Herald Tribune.

Mexico's taking its time to become a wealthy country with strong roots
Moody's Investors Service predicted that Mexico's economy would be stable for the near future, and likely beyond.

"The automobile parts industry will be among Mexico's strongest sectors, while consumer and retail sectors will be strengthening after being slowed this year by new taxes and the sluggish economic recovery," Alonso Sanchez Rosario, a Moody's Vice President and Senior Analyst said in a Moody's report called "Corporate Credit Quality in Mexico: Mexico's Corporate Credit Quality Will Remain Stable in 2015 Amid Modest Growth."

Moody's predicted Mexico will see a stronger demand in some of its manufacturing and chemical-production industries. Part of this growth is due to Mexico's unfolding infrastructure as it moves from a developing nation to a fully developed country with a strong middle class that makes money by working in factories.

Mexico is taking small steps to ensure that its citizens can adapt to the changing climate of the nation. In 2014, taxes were raised to help pay for building new roads and railways.

Companies that want to take advantage of this growth by expanding to Mexico can talk to a Mexico shelter company. Such a business works at making the transition to operating in two countries instead of one easier. Shelter companies know Mexico inside and out, and can help manufacturers determine the best places to build factories and the best ways to get help at setting up shop.


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