AMPIP Survey Reveals Mexico’s Nearshoring Potential

The Mexican Association of Private Industrial Parks (AMPIP) expects a greater arrival of companies in the next two years as a result of nearshoring. To maximize this opportunity, there is a need to improve energy policies, ensure water supply and reduce crime, found a survey by AMPIP and BBVA Research.

AMPIP and BBVA surveyed business executives on their views and perspectives on nearshoring. As of 2023, AMPIP represents about 430 industrial parks in 21 states in Mexico, with more than 3,800 companies installed. AMPIP members have an occupancy rate of 97.9% as of the end of 2022 (an increase of 1.76% compared to 2019), with growth in inventories of 30% in the same period. 

Foreign companies may be in the preliminary stages of relocating to Mexico, according to the survey. Between 2018 and 2022, Mexico attracted 19% less FDI than during 2013-2017. The fall in FDI was even more pronounced in the manufacturing sector, which attracted 41% less in FDI during the latter period. All regions in Mexico showed a fall in manufacturing investment, with the Metropolitan area and the south standing out with losses of approximately US$15 billion and US$11 billion, respectively. On the other hand, sectors such as computers and electronics are growing in the northwest of the country, while transportation equipment and primary metal are proliferation in the northeast. 

About 25% of the companies that will benefit from the relocation are integrated into global value chains with an export specialization, found the survey. The regions that benefit most from an expectation of greater demand from the US and FDI are the northeast and northwest of Mexico. However, to continue growing, drawbacks reported by companies in industrial parks must be addressed, including supplying energy from clean sources and at competitive prices. 

“Mexico must prepare its energy infrastructure for an expansion by focusing on renewable energies that, in addition to being more efficient in terms of costs, represent an improvement in terms of emissions that in the medium term could be an increasingly relevant requirement for the companies,” reads the report. Addressing this trend would favor Mexico in terms of competitiveness and compliance with international agreements related to climate change. Regulatory improvement in terms of procedures and permits could be an initial step to reduce drawbacks. 

Toward 2025, the demand for industrial space is expected to grow: 453 new companies are expected to arrive in the next two years, an average of 227 new companies per year between 2023-2025.