Mexico’s Business Hubs: Promising Growth Opportunities

Mexico • June 14, 2023 • Written by: Ongresso - Business Beyond Borders

Positive Forecast for Mexico’s Economy

According to a copy of the government’s newest budget predictions, the Mexican economy might grow by up to 3.0% this year and next. Boosted by more manufacturing investment and lower inflation. The ministry predicts that Latin America’s second-largest economy would grow between 2.2% and 3.0% this year. Futhermore, between 1.6% and 3.0% in 2024, as the country works to recover from pandemic-related losses.

Prior to the coronavirus pandemic, experts estimated that Mexico will be the world’s seventh largest economy by 2050. Owing to its favorable economic environment. Investing in Mexico thus appeared to be an appealing alternative for foreign investors. As a result, during the next three decades, Mexico would grow at a 3.5% annual average rate, outpacing industrialized countries. According to UNCTAD (United Nations Conferences on Trade and Development), Mexico is now one of the most appealing places for foreign direct investment.

Mexico City

Mexico City, the country’s capital, is a thriving business center with significant economic significance. It serves as the political center of the country and attracts a diverse range of companies and investment opportunities. The city’s finance and banking sector is thriving, with multinational institutions and a gateway to Latin America. Mexico City excels in manufacturing as well, particularly in the automotive, aerospace, and electronics industries, owing to its strategic position and talented labor force. These allow business leaders and investors convenient access. To meet the needs of various industries, the city provides contemporary office spaces, meeting facilities, and specialized business areas. The business-friendly rules and incentives in Mexico City attract investment. Through tax breaks, reduced bureaucracies, and special economic zones, the government encourages entrepreneurship, innovation, and international investment. With helpful programs and incubators, the city nurtures a thriving startup ecosystem.

Monterrey

Manufacturing in Monterrey and Nuevo León has grown by 10% on average in each of the region’s last four census periods. Furthermore, during the uncertain 2022 calendar year, the manufacturing industry in Monterrey and the state of Nuevo Leon displayed the biggest economic growth prospects. The importance of manufacturing activity in Monterrey and Nuevo Leon is reflected in the fact that industry accounts for 30% of the state’s GDP. Moreover, despite the difficulties encountered during the pandemic, manufacturing operations in Monterrey and Nuevo Leon accounted for 33% of all new jobs created. Manufacturing in Monterrey and Nuevo Leon has many strengths, including workforce preparation and employee skills, as well as the ability to adapt to evolving technologies. These characteristics enabled the region’s economy to meet the challenges posed by the coronavirus pandemic.

Guadalajara

Guadalajara has established itself as a Mexican IT hotspot. The reason for that are the many IT and tech companies that have set up shop there, thereby shattering the short-sighted perception that the city is only about tequila and mariachi music. Moreover, there are numerous American technology enterprises in Guadalajara. Guadalajara, a jewel of the Latin American software sector, has evolved into a cutting-edge city with a thriving innovation ecosystem. Jalisco is home to 40% of Mexico’s IT industry. Moreover, 650 specialized enterprises that employ 100,000 people. The state also boasts a young population, with an average age of 25. Furthermore, the population of Jalisco and Guadalajara is well educated. The reasons behind this are the state’s many notable institutions, which include 16 technical institutes and 12 universities.

Nearshoring and Outsourcing HR in Mexico: Factors to Consider When Choosing a City

Mexico provides various advantages as a strategic site for nearshoring or outsourcing HR activities. However, selecting the appropriate city is critical to ensuring a successful and effective business.

Skilled workers are readily available in cities like Mexico City, Monterrey, and Guadalajara, with robust talent pools and educational systems.
Infrastructure and connectivity are vital considerations, with well-developed transportation networks and advanced communication technologies enhancing collaboration.
Mexico City stands out with strong infrastructure and connectivity as the country’s capital.
Evaluation of each city's business climate and regulations is essential, with some cities offering more business-friendly rules and incentives for establishing and operating HR outsourcing centers.

Conclusion

Mexico City, Monterrey, and Guadalajara offer favorable business environments with strong infrastructure. Moreover, they offer skilled workforce, and business-friendly regulations. Mexico’s transition to liberal economic policies and its attractiveness for foreign direct investment contribute to its positive outlook. Futhermore, Monterrey’s manufacturing industry has shown significant growth, while Guadalajara has become an IT hotspot with a thriving innovation ecosystem. When considering nearshoring or outsourcing HR activities, cities like Mexico City, Monterrey, and Guadalajara provide suitable talent pools, infrastructure, and connectivity. Overall, Mexico’s economic growth and business opportunities make it an appealing destination for investors and businesses.