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Mexico Real Estate News: Mexico On Track to Surpass Brazil & China

15 November, 2012

By the time the next World Cup rolls around,Mexico may beat Brazil,but not just on the soccer field. In fact,a growing number of analysts are predicting that Mexico is poised to surpass Brazil as Latin America’s largest economy by the year 2022 and is also likely to continue attracting manufacturers that previously relied on China.

Mexico’s stable economy,geographical location and skilled,cost-effective workforce has been attracting attention from some of the world’s biggest financial firms,including Nomura Group,The Boston Consulting Group and Barclays,along with some of the world’s largest automotive manufacturers. 

“We forecast that Mexico may overtake Brazil as the No. 1 economy in Latin America as early as 2022,on the back of strong growth in human capital and total productivity,” wrote Asia-based Nomura Group analysts in August of this year. 

In 2011,Mexico realized a growth rate of 3.9 percent and the nation’s central bank is predicting growth of at least 4.25 percent in 2012,if not higher. Meanwhile,Brazil slowed to a 2.7 percent growth rate in 2011 and a paltry 1.6 percent is predicted for 2012. Also,a growing number of manufacturers are opting to move operations to Mexico,due in part to China’s rising labor costs. In fact,the Boston Consulting Group estimates that by 2015 wages in China will hit $5.30 per hour,while Mexico will be at $3.55.

“We believe that this year the costs of producing in Mexico are the same or lower than the costs of producing in China,” stated Hal Sirkin,a senior partner at the Boston Consulting Group.

In addition,Barclay’s observed that Mexico has surpassed China in manufacturing exports after 2008-2009,with the group’s bank analyst Marco Oviedo stating the increase is predicted to be “structural and persistent.”

As part of this jump,Mexico emerged as the world’s fourth largest automobile manufacturer in 2012,moving up from fifth place,while a variety of aerospace,electronics and telecommunications companies have also opted to move production to Mexico real estate. In 2012 alone,Audi,Nissan,Ford and BMW have announced that they will open new manufacturing facilities here,citing Mexico’s geographical proximity to the U.S.,Latin America and Europe,in addition to its workforce.

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