Three Mexican States Lead New FDI Amid Investor Caution

Summary: Mexico attracted US$2.73 billion in new FDI during 1H2026, down 13.4% year over year, as USMCA review uncertainty and changing trade conditions encouraged companies to delay new capital commitments. Baja California Sur, Nuevo Leon and Queretaro led new investment, while reinvested earnings drove most of Mexico’s nearly US$35 billion total FDI, underscoring the gap between continued commitment from existing investors and caution toward greenfield projects. 

Mexico attracted US$2.73 billion in new foreign direct investment (FDI) during 1H2026, a 13.4% decline from the same period a year earlier, as uncertainty surrounding the USMCA review and changing trade conditions prompted companies to take a more cautious approach to new capital commitments.

Despite the slowdown, Baja California Sur, Nuevo Leon and Queretaro stood out among Mexican states for their ability to attract fresh foreign capital. Their performance contrasts with a broader national FDI figure of nearly US$35 billion 1H2026, which reached a record for the period but was dominated by the reinvestment of earnings generated by companies already operating in Mexico.

New investment accounted for only 7.8% of total FDI during the period, highlighting the difference between maintaining existing operations in Mexico and committing capital to new projects.

Baja California Sur Leads New Investment

The concentration of new capital in a small group of states underscores how investment decisions are increasingly tied to specific industries, regional advantages and established economic ecosystems. Baja California Sur ranked first nationally, attracting US$524 million in new FDI during 1H2026, an annual increase of 28%.

The state’s investment was concentrated largely in pensions, guest houses and hotel services, reflecting the importance of tourism and related activities to its economy. The result also demonstrates that foreign capital is continuing to flow into sectors beyond Mexico’s traditional manufacturing hubs.

Baja California Sur’s performance was followed by Nuevo Leon, whose industrial base helped it secure the second-highest amount of new foreign capital during the period. n

Nuevo Leon and Queretaro Strengthen Industrial Appeal

Nuevo Leon attracted US$473 million in new FDI, representing a 190.1% annual increase. The state’s inflows were supported by wholesale truck commerce, vehicle manufacturing and the basic iron and steel industry, reinforcing its position as one of Mexico’s most important industrial and manufacturing centers.

Queretaro ranked third with US$410 million, up 158.6% from the first half of 2025. Its investment was distributed across electricity generation and related activities, food production, auto parts and electronic components.

The composition of investment in both states reflects the continued importance of manufacturing and industrial supply chains to Mexico’s foreign investment strategy. At the same time, the sectors attracting capital point to the intersection between traditional manufacturing, electrification, electronics and increasingly complex North American supply chains. 

Investment Remains Uneven Across Mexico

The performance of these three states comes as investment continues to vary substantially across the country. Several other states attracted between US$100 million and US$300 million in new foreign capital during 1H2026.

Jalisco, Quintana Roo, Nayarit, Chihuahua, Baja California, Puebla and Guanajuato were among the states in this middle tier. Other entities recorded between US$20 million and US$100 million, while several states received less than US$7 million.

The uneven distribution suggests that Mexico’s ability to capture new foreign capital remains closely linked to industrial specialization, infrastructure, supply-chain integration and proximity to key markets. It also highlights the challenge for states seeking to attract greenfield projects amid greater uncertainty over trade policy. 

USMCA Review Creates Investment Uncertainty

The geographic concentration of new FDI is occurring against a more uncertain investment environment, particularly as companies assess the future of the United States-Mexico-Canada Agreement. The United States declined to renew the agreement outright in July and instead moved toward annual reviews, leaving companies to reassess the stability of the North American trade framework.

Although the USMCA remains legally in force through 2036, the shift toward recurring reviews has introduced another variable into long-term investment decisions. Companies planning factories, supply chains and other projects that require years of capital expenditure must now consider how future negotiations could affect tariffs, rules of origin and access to the US market, reported MBN. 

Reports of manufacturers reassessing projects illustrate the potential impact. Some auto-parts companies in Aguascalientes have considered relocating operations to Vietnam, while executives at multinational companies have described adopting a wait-and-see approach until there is greater clarity over the trade agreement.

The uncertainty comes after fixed investment contracted sharply in Mexico during 2025, while Fitch Ratings has warned that prolonged annual reviews could reduce the long-term visibility required for major investment decisions. 

Reinvestment Supports Mexico’s FDI Total

The composition of Mexico’s FDI data provides a more nuanced picture of investor sentiment. While nearly US$35 billion entered the country during 1H2026, most of the amount represented reinvested earnings rather than new projects.

This distinction is significant because reinvestment indicates that companies already established in Mexico continue to allocate capital to their local operations, while the decline in new investment points to greater hesitation over additional commitments.

Greenfield investment also faced pressure, falling by nearly half in 2025 to US$24 billion, according to UNCTAD figures. The trend suggests that Mexico continues to benefit from its existing industrial footprint, even as some investors delay decisions on entirely new facilities. 

Exports Offer a Counterweight to Investment Caution

While new FDI remains under pressure, exports have provided an important source of economic momentum. Mexico’s economy expanded 1.4% in 2Q2026, its strongest quarterly performance since early 2022, supported largely by exports of computers, servers and AI-related processing equipment to the United States.

Banco de México has projected moderate export growth while warning that uncertainty over the USMCA remains an adverse factor for investment decisions. With roughly 80% of Mexico’s exports destined for the United States, the outcome of the trade review will remain critical to corporate planning.

For now, Baja California Sur, Nuevo Leon and Queretaro demonstrate that Mexico can continue attracting new foreign capital even in a more uncertain environment. However, the national decline in fresh investment suggests that the country’s ability to convert nearshoring opportunities and trade integration into new projects will depend increasingly on greater certainty around North American trade policy.