Mexico Faces Job Creation Test Amid Moderate Growth Forecasts

Mexico enters 2026 facing a labor market challenge shaped by moderate economic growth, persistent informality and structural barriers to expanding formal employment, according to COPARMEX.

Economic projections for the year point to relative macroeconomic stability but limited momentum. Estimates from the International Monetary Fund (IMF) and the Organization for Economic Cooperation and Development (OECD) place GDP growth between 1.2% and 1.5%, broadly in line with Banco de México’s (Banxico) forecast of 1.1%. The federal government projects higher growth of between 1.8% and 2.8%, above the technical consensus.

Banxico’s latest expectations survey anticipates inflation of 3.8%, economic growth of 1.3% and an exchange rate ranging from MX$19.6 to MX$19.8 per dollar. While these figures suggest stability, COPARMEX warns that such conditions remain insufficient to generate the volume and quality of formal jobs required to improve income levels and social welfare.

Despite increases in the minimum wage and some gains in household income, a significant share of the population remains in poverty or labor poverty, particularly within the informal economy. This limits the social impact of growth and constrains productivity gains across the labor market.

The challenge is compounded by demographic and participation trends. Mexico is expected to see slower expansion of its economically active population in 2026, alongside a national labor participation rate of 59.5%. Gender gaps remain pronounced, with a difference of nearly 30 percentage points between male and female participation, reducing the effective labor base available to sustain economic activity.

Informality continues to be a central constraint. Data from the National Survey of Occupation and Employment shows that over 55% of workers remain in informal jobs, limiting access to social security and weakening public finances. COPARMEX aligns with the International Labour Organization’s (ILO) position that without a comprehensive strategy focused on formalization, training and decent work, informality is likely to remain between 54% and 56% in the coming years.

In this context, formal employment remains the most effective social policy, argues COPARMEX. Improving productivity, strengthening micro, small and medium-sized enterprises, and facilitating access to financing and technology are seen as critical to expanding formal job creation and sustaining income growth.

Public policy also plays a central role. COPARMEX notes that the 2026 Economic Package shows continued gaps in social investment, particularly in health and education, which it views as essential to building human capital and supporting long-term labor mobility. Without stronger foundations in these areas, income gains risk proving temporary.

Security conditions further affect employment and talent retention. Elevated perceptions of insecurity, record levels of extortion, and limited enforcement capacity continue to raise operating costs for businesses. COPARMEX estimates that insecurity costs the economy several points of GDP annually, discouraging investment and constraining job creation, especially in regions with higher risk levels.

Political and institutional uncertainty add another layer of complexity. Ongoing discussions around electoral, judicial, and governance reforms, alongside concerns over weakened institutional checks, have weighed on business confidence and long-term hiring decisions. Rising public debt and fiscal pressures further narrow the government’s room to maneuver.

At the same time, COPARMEX identifies opportunities linked to regional integration, nearshoring, and the upcoming review of the USMCA. The agreement remains a key anchor for Mexico’s labor market, but potential changes to rules of origin and labor mechanisms will require coordination between government and the private sector to preserve competitiveness and investment flows.

COPARMEX argues that Mexico still has the capacity to attract investment and generate formal employment, but only if it advances a coherent agenda centered on legal certainty, security, competitive energy supply, responsible public finances, stronger SMEs, and deeper North American integration. Translating economic stability into sustained job creation, the organization argues, will define whether 2026 becomes a year of consolidation or prolonged labor stagnation.