Mexico's Nearshoring Appeal Draws Spanish Investors’ Attention

Spanish companies have exhibited significantly greater interest in Mexico, nearly four times more than in previous years. This heightened interest can be attributed to the ongoing relocations of companies from Asia, Europe, and the US, with a particular focus on manufacturing, said Antonio Basagoiti, President, Spanish Chamber of Commerce (CAMESCOM). 

The concept of nearshoring is gaining relevance as companies increasingly consider Latin America, and Mexico in particular, as a prime destination for investment. In the first half of 2023, the country attracted US$29 billion in foreign direct investment (FDI), representing a 41% increase compared to the same period in 2022. The main contributors to this investment influx include the US with 43%, Spain with 15%, Germany with 9%, Argentina with 8% and Japan with 7%. 

Interest in Mexico has also been fueled by a recent revision of the country’s economic outlook for 2023 by the International Monetary Fund (IMF). Its latest projection indicates a 2.6% increase in GDP, up from the earlier estimate of 1.8%. This updated forecast aligns with the prediction of approximately 3% growth by the Mexican Ministry of Finance and Public Credit's (SHCP) prediction of approximately 3% growth. This adjustment can be due to the economy’s recovery after 2020’s health and financial crisis, which affected the services sector, and because of the new investment wave or nearshoring. 

Numerous Spanish enterprises currently have investments in Mexico, including companies like Iberdrola and Gas Natural Fenosa, OHL, FCC, Isolux and Abengoa. In banking, Santander, BBVA and Sabadell are prominent players, while in the tourism sector companies such as Sol Melia, Riu, Barceló and NH have a strong presence. 

Basagotiti added that CAMESCOM evaluates the growth potential that Mexico represents for Spanish investors, irrespective of the political landscape. 

Mexico currently ranks 14th  in the world economy with a GDP of US$1.66 trillion, while Spain occupies the 15th position, with US$1.49 trillion. The top positions in this ranking are held by the US, China, Japan, Germany and India.