June 3, 2014
Abundant cheap labor has helped Mexico lure billions of dollars in foreign investment in recent years and spur a manufacturing sector so dynamic it has been likened to China.
But the same low wages that help make manufacturers competitive are a long-term drag on the economy. Millions of people working off the books for paltry sums holds back private consumption, crucial for sustained growth.
The government has slashed its growth forecast for 2014 after the economy expanded by just 0.3 percent in the first quarter, well short of expectations.
November 13, 2013
Nissan Motor Co Ltd will build 1 million cars in Mexico by 2016, cementing the country’s position as the export hub for the Japanese automaker in the Americas, Chief Executive Carlos Ghosn told Reuters as he inaugurated a $2 billion plant.
Most of the cars from the new plant in Aguascalientes in central Mexico will be sent by rail to destinations throughout North and South America. A staff of 3,000 in the light, airy plant filled with rows of shiny yellow robots will produce one car every 38 seconds, in partnership with Nissan’s other Aguascalientes plant.
September 20, 2013
by Christohper Wilson
For full article press here
Five years ago, the United States and China launched the Strategic and Economic Dialogue, a reflection of the growing complexity and enormous importance of US-China relations. Earlier this year at their meeting in Mexico City, President Obama and President Peña Nieto agreed to a similar initiative, the US-Mexico High Level Economic Dialogue (HLED), for much the same reasons, and Vice President Biden is in Mexico today to officially launch the initiative.
Before looking at the content of the Dialogue, let’s take a quick look at why this matters:
Mexico is the United States’ second largest export market (Canada is first), and since 2009, exports to Mexico have grown faster than exports to any of our other top trading partners. Some six million US jobs depend on trade with Mexico. Investment and financial flows between the two countries are also important, but the massive trade relationship is still the centerpiece of the economic relationship.
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July 3, 2013
The shale gas boom has done a lot to boost the US economy. It’s such a big deal you can see it from space. All that new natural gas has lowered energy costs, which has led analysts to wonder if it could help make America’s energy-heavy manufacturing businesses more competitive with countries that have low labor costs but over-burdened energy infrastructure. But there’s a lot standing in the way of that vision, including the potential for gas exports to affect the value of the dollar, and the observation that maybe energy costs aren’t such a big deal.
But where the US is faltering, Mexico is taking advantage of all that cheap natural gas to boost factories; last year, pipelines brought more natural gas across the border than ever before. Mexico is already successfully competing with places like China on labor prices, but its energy costs are lower, too. Combine that with its proximity to the United States and deep integration into the American supply chain, and you’ve got a recipe for export-oriented success. Pemex, the country’s state-owned oil company, is spending $3.3 billion to build a new, 750-mile pipeline from Los Ramones, Mexico, near the country’s industrial heartland, to Agua Dulce, near Texas’ shale oil fields.
June 28, 2013
The Wall Street Journal, 6/28/2013
Within five years, higher manufacturing exports due to a widening cost advantage over China and other major economies could add $20 billion to $60 billion in output to Mexico’s economy annually. And thanks to the North America Free Trade Agreement (NAFTA), U.S. manufacturers of components for everything from automobiles to computers assembled in Mexico also stand to benefit, according to new research by The Boston Consulting Group (BCG).
The key drivers of Mexico’s improving competitive edge are relatively low labor costs and shorter supply chains due to the country’s proximity to markets in the U.S. Another important advantage is that Mexico has 44 free-trade agreements — more than any other nation — allowing many of its exports to enter major economies with few or no duties.
June 20, 2013
Mexico wants China to loosen up and have a little tequila. Actually, lots of it. Since China President Xi Jinping and Mexico’s Enrique Pena Nieto broke a diplomatic and economic chill and agreed to boost trade, tequila producers have been gearing up to make the world’s most populous country their second-biggest market, after the margarita-loving United States.
The drink synonymous with Mexico already is available in more than 100 countries. But export of the alcoholic beverage to China has been limited by legal and sanitary restrictions. Chinese authorities changed their rules last week, deciding that the purest and best tequila, known as blue agave, has no detrimental health effects. That has opened the door for businesses in both countries to begin promoting and exploring ways to sell more tequila. With the purchasing power of 1.3 billion Chinese, tequila producers see a niche market, especially among the emerging upper class.
June 12, 2013
Financial Times, 6/11/2013
Those hoping that April industrial production data out on Tuesday would provide some measure of comfort on the direction of Mexico’s economy would be sorely disappointed. Industrial output in Latin America’s second largest economy fell 1.7 per cent compared to March in seasonally adjusted terms. The drop was the biggest monthly decline so far this year and the worst since December 2012 when it fell 2 per cent. Year-on-year, industrial production rose 3.3 per cent compared to April 2012, far below analysts’ expectations of a 5.3 per cent increase.
Behind the headline figures, manufacturing, which provides the bulk of Mexico’s non-oil exports, fell 1.2 per cent in April compared to March on a seasonally adjusted basis. It’s the first drop of the year and the biggest decline since 2012. The manufacturing number, combined with the 3.1 per cent monthly drop in construction activities, were so disappointing that analysts said they would immediately go back to their economic models to recalculate this year’s growth rate – just less than two months after they lowered their GDP forecasts for the year.
May 22, 2013
Oil & Gas Journal, 5/21/2013
As the US debates exporting more plentiful natural gas from new liquefaction along the East and Gulf coasts, gas exports to Mexico in the past 3 years have doubled, according to a recent research note from Barclays. Over the same period, natural gas production in Mexico has declined 11% with associated gas production on the rise, while nonassociated gas is declining, Barclays analyst Biliana Pehlivanova said in the research note.
Barclays expects US exports to Mexico to continue growing robustly, averaging 2 bcfd in 2013 and 2.2 bcfd in 2014. Growth is likely to accelerate beyond 2014, as more cross-border and Mexican pipeline capacity comes into operation. Growth of Mexican gas demand and pipeline capacity expansions promise to “siphon increasing amounts of gas from the US,” Pehlivanova noted.
May 8, 2013
ABC News, 5/6/2013
There is surprising cargo showing up on trains in Mexico. Straight from Dearborn, Mich., Ford vehicles are heading into Mexico City, where demand is high among Mexico’s growing middle class. It’s the quality, locals say, that they’re after. Vehicles like the Ford Escape travel for 14 days on a train from plants in Avon Lake, Ohio; Oakville, La.; Chicago; and Kansas City, Mo.
But cars aren’t the only American-made products in demand in Mexico. Exports to Mexico and all of Latin America, including Brazil and Argentina, are up 121 percent in the last decade. Even the beef burgers at Carl’s Jr. in Mexico are imported from the United States. The fast food chain, which has opened 20 new restaurants in Mexico this year