Nearshoring Manufacturing Considerations for 2025

The manufacturing industry has had its fair share of ups and downs in recent years, yet the IMMEX program in Mexico has remained relatively steady. Though there are always changes to anticipate, trends are forecasting a positive outlook heading into 2025.

Let’s explore more of what U.S. and other foreign manufacturers can expect when it comes to costs and competition in Mexico.

Manufacturing Costs Remain Competitive

For manufacturing companies considering expanding to Mexico, costs remain competitive compared to the U.S. and China. And, despite changes in government leadership, the landscape looks stable to move operations.

With average inflation, any adjustments are expected to be similar to those experienced in 2024. Plus, certain cost-saving advantages remain in place, such as the proximity of Mexico to the U.S. audience and the free trade agreements Mexico holds with other countries, particularly the USMCA.

Solid Infrastructure and Logistics

In terms of the flow of commercial trade, infrastructure can always be improved. However, there are tens of thousands of truck crossings and hundreds of millions in bilateral trade every day between the U.S. and Mexico.

Customs are well-integrated to ensure as much efficiency as possible, and this shouldn’t change anytime soon. Furthermore, with established transportation routes and advanced warehouse production, manufacturing in Mexico will continue to be the best cost-competitive solution for the North American market.

Easier to Find a Building

Though this year was not as dynamic as 2022 or 2023, the construction of new commercial buildings in Mexico continued strong, and more space became available than in recent years. With the expansion of available facilities, manufacturers will find it easier to negotiate leases and keep costs close to what they were in 2024.

Push for Competitive Employee Benefits

One of the most dependable benefits of manufacturing in Mexico is the availability of a technically skilled workforce with thousands graduating every year from universities and/or technical schools. This year, the unemployment rate has been on the lower end, making room for many job opportunities, which makes recruiting top talent increasingly competitive.

Therefore, U.S. and other foreign manufacturers must establish a strong recruiting process and re-evaluate benefits to fit what is expected by talent in Mexico. These include traditional healthcare and retirement savings benefits, in addition to food coupons and transportation to work, as well as bonuses for punctuality and attendance, and paid vacations (separate from paid time off), as part of a robust compensation package.

Finding Success with a Shelter Partner

Historically, manufacturing in Mexico has always been a cost-effective strategy for U.S. and other foreign manufacturers to expand production. There are two options to get started: establishing a standalone entity or enlisting the experienced support of a shelter company.

Working under a Mexico shelter company is the safest and most efficient way to do business. Plus, it frees up time for manufacturers to fully focus on production while maintaining complete control over all processes and intellectual property rights.

A shelter company also simplifies the transition to manufacturing in Mexico by handling all the administrative responsibilities necessary for setup. This includes site selection, recruiting and hiring employees, managing taxes and accounting, and overseeing trade compliance.

Thinking of diversifying your portfolio to include Mexico in 2025? Contact IVEMSA to discuss how our shelter services can best align with your manufacturing goals.

Source:

https://opendata.sandag.org/stories/s/Border-Crossing-and-Trade/adfp-wjae/