With wages rising rapidly in China, Mexico once again has become an attractive manufacturing hub—even to the Chinese.
On Oct. 27, the state-owned China Communications Construction Co. signed a preliminary agreement with Jalisco to build an industrial park that would potentially house dozens of Chinese manufacturers, Reuters reported.
The deal underscores the big shift in production costs across the two countries.
In 2000, workers in Mexico’s manufacturing sector earned nearly 60 percent more than their Chinese counterparts.
El Economista – Of the candidates for maquiladora jobs requiring technical work, 71 percent have educational or physical health deficiencies, a survey revealed. The results, covering surveys in 250 factories, showed that 42 percent cannot read, write or handle mathematical or have theability to follow directions.
CNBC – A number of factors influenced Mexico’s slow but steady rise as a manufacturing hub for multinational corporations, including NAFTA, other trade agreements, cheap labor costs and proximity to the United States. But observers point to another recent development that they see accelerating investment in Mexico and boosting economic productivity: Electricity is getting cheaper.
Business Journals – Caterpillar plans to move its vocational truck manufacturing operations from Escobedo, Nuevo Leon, to a plant in Victoria, Texas. Caterpillar opened the Victoria plant in 2012 and produces hydraulic excavators there. Now, it will expand the plant to design and manufacture vocational truck products.
Tire Business – Goodyear broke ground July 28 for the first plant it will build in the Americas in a quarter of a century. The 1 million-plus-sq.-ft. plant, representing an investment of up to $550 million, will be built on the southern edge of San Luis Potosí.
El Paso Times – Ciudad Juarez has become the largest producer of solar panels in Mexico and Latin America. The panels are exported to the United States and other countries in South America and Europe for residential, utility and commercial photovoltaic projects.
Reuters – Mexico unveiled news measures to protect its struggling steel industry on Wednesday as slack global demand, oversupply from China and cheap imports from Russia have hammered steelmakers in Latin America’s second largest economy.
JOC – With an increasingly skilled Mexican workforce and a rapidly growing middle class, many international companies are investing in facilities that manufacture higher-value products for the U.S. and Mexico’s domestic market, and still more are planning to invest there.
El Dario – Seventy percent of the manufactured goods that Mexico exports to the United States are at risk of being replaced by Chinese products due to declining competitiveness in the country, warned CONCAMIN.
Reuters – Mexico’s factory exports suffered their biggest fall in over two years in May, pointing to weaker demand from its main trade partner, the United States, though a jump in non-oil consumer imports pointed to more robust spending at home.
El Dario – A serious problem in production plants in the Southeast Region, centered around Saltillo-Ramos Arizpe, is constant staff turnover. In some companies, the turnover rate is 20 percent, although the average is 5 percent.
El Economista – So far in 2015, Mexico recorded finished steel products of 23.1 million tons, up 2.6 percent; while Brazil’s corresponding volume was 22.7 million tons, down 7.8 percent at annual rates.
Reuters – Mexican industrial output unexpectedly slipped in April, hit by the sharpest drop in crude oil production in nearly seven years even as factories posted their strongest growth since late 2009.