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Economist "Mexico's Exports are Growing"

25 January, 2015

For years,Chinese competition has cut into Canadian and Mexican exports to the US. Recently,the Economist has reported that Mexico is now growing and gaining more of its share of the US market. To continue with this momentum,Mexico is rapidly setting up infrastructure projects as more opportunities are created in this economy. Outside Monterrey,1000 hectares will be transformed into the "Interpuerto",a customs clearing center for goods on their way to the states. This 2 billion dollar project will speed goods and cut the time and the cumbersome process of inspecting goods at the long lines currently assembled at custom posts in the Northern Mexico.

Mexico's share of the American market has rises to 12.2% (highest level since NAFTA went into effect). Geography is fueling (pun intended) much of Mexico's continuing success. The cost of fuel with exporting from the economic power that is China,is continuing to level and even benefit the playing fields for other countries,and especially Mexico. In addition,China is slapped with a 8.5% tariff that Mexico (under NAFTA) is exempt from. For example,although stone from China is less expensive than stone from Mexico,when you add on fuel costs and the 8.5% tariff,Mexico is more economical and less expensive to buy from than China.

More companies,including Chinese companies,are looking to set up in the backyard (Mexico) of the economic powerhouse that is the United States. Carmakers alone (focusing on "small car" production) have announced a 4.4 billion dollar investment over the next four years. Mexico faired better than much of the world last year and capitalized on their resiliency during these economic times. We have all heard and have been touched by the "China Factor" however,we should be aware of what is happening much closer to home.

The Mexican economy is benefitting from one of the lowest business tax environments,double-digit bank loan growth,lower unemployment,low national debt,an up-tick in tourism and increased inflow of real estate investments.