Mexico is now Top 25 for Foreign Direct Investment

Mexico has reclaimed its position in the top 25 countries attracting foreign direct investment (FDI) thanks to the surge in capital influx for the construction of plants, factories, and production lines in the manufacturing sector migrating from Asia and other regions to the Mexican economy, a phenomenon known as nearshoring, highlighted experts.

According to Omar Troncoso, CEO of Kearney, “Mexico has re-entered the top 25, ranking 21st, after being absent for four years from the foreign direct investment ranking.”

Troncoso explained that there is a shift of investments from Asia and other countries towards the Mexican market, driven by disruptions in the supply chain, geopolitical tensions, and the trade war between the United States and China.

The last time Mexico was among the top 25 economies attracting significant foreign investment was during the first year of Andrés Manuel López Obrador’s government when it ranked 25th, before dropping out.

During Enrique Peña Nieto’s administration, Mexico ranked ninth in attracting foreign direct investment in 2015, but since then, it faced challenges.

“In 2023, announcements of foreign direct investment exceeded $106 billion,” Troncoso noted. “The amount of foreign direct investment announced from January 2023 to March 2024 is 3.8 times the amount of FDI realized during 2023.”

Furthermore, the relocation of companies is driven by resource scarcity, geopolitical tensions between Russia and Australia, and imbalances in the raw materials market.

Troncoso added that Mexico rose to become the world’s 12th-largest economy in 2023 and is strategically positioning itself to continue benefiting from the strategies of the United States and Europe.

Omar Troncoso emphasized that Mexico is the country benefiting the most from manufacturing investments migrating from Asia and other regions. Investors believe that Mexico will remain pivotal for reshoring to the United States, as it receives 2.7 percent of foreign direct investment as a proportion of GDP, compared to Brazil’s 4.8 percent.

He further noted that the manufacturing industry remains the primary destination for foreign direct investment in Mexico, although financial services increased in attractiveness in 2023.

CEOs and manufacturing directors show a preference for Mexico over Canada to locate their operations, highlighting Mexico’s growing appeal in the global market.

Resumen en Español: 

México ha recuperado su posición en el top 25 de los países que atraen inversión extranjera directa gracias al crecimiento en la inversión para la construcción de plantas y fábricas en el sector manufacturero, un fenómeno conocido como nearshoring. Esta tendencia ha sido impulsada por la migración de inversiones desde Asia y otras regiones hacia la economía mexicana, debido a diversas tensiones geopolíticas y la guerra comercial entre Estados Unidos y China. Durante el gobierno de López Obrador, México ocupó el puesto 25 antes de salir del ranking, mientras que en el gobierno de Peña Nieto llegó a estar en el noveno lugar. La inversión extranjera directa anunciada en 2023 superó los $106 mil millones, y México se posiciona estratégicamente para seguir beneficiándose de las estrategias de Estados Unidos y Europa. Los inversionistas consideran que México seguirá siendo crucial para el reshoring hacia Estados Unidos, y la industria manufacturera continúa siendo el principal destino de la inversión extranjera directa en el país. Los CEO y directores de manufactura muestran una preferencia por México sobre Canadá para localizar sus operaciones, lo que resalta el creciente atractivo de México en el mercado global.