Nearshoring: Key for Northern Markets to Report Record Demand Figures
Solili | December 20, 2021 |

The cities that are located in the north of the country, where Monterrey, Chihuahua, Tecate and Saltillo stand out, together with those that are located on the border such as Ciudad Juárez, Tijuana, Mexicali y Reynosa, of those monitored by Solili, manage to accumulate almost 60% of the industrial demand, during the period from January to November 2021.

In the ranking of the first five cities with the highest gross demand at the national level, 4 of them are from the north such as Monterrey, Tijuana, Ciudad Juárez and Saltillo, with 19%, 12%, 10% and 7% of the demand at the national level during these 11 months have elapsed.

This strong dynamism of industrial activity is explained by the relocation of production processes that have taken place mainly on the border.

Mexican manufacturing has strengthened over the last few years where the automotive, aerospace, medical supplies and electronics sectors have taken the lead developing an increasingly robust industry.

Here at the border, the vision of private entrepreneurs supported by public initiatives have managed to create robust supply chains where they seek to cover the necessary supplies with local positions to reduce dependence on inputs from abroad.

See also: Lear expands operations in Coahuila and invests 20 million dollars

For example, the government of Nuevo León indicates that with the collaboration of the triple helix, the economic development of the entity, the development of suppliers, the promotion of exports and the attraction of companies are promoted.

Collaborative competition has made clusters such as the Nuevo León automotive or CLAUT understanding of the industry as an integrated chain from vehicle assemblers (OEM) to first, second and third level suppliers, better known as "Tier1" , "Tier2" and "Tier3", as well as support companies such as logistics and consulting services, as indicated on its website.

The MACH or advanced manufacturing cluster in Chihuahua is another example of the triangulated work between academia, the government and the aerospace, automotive, electronics and medical industries, among the main ones.

Relocating operations in this state and supporting the expansion of the groups that are already living in the region have been the main tasks throughout 2021 in Chihuahua.

As for Mexico's participation in business in the United States, according to the latest Census figures between January and September 2021, it continued to hold first place with 14.6% with Canada very close, only one percentage point below.

For Mexico it continues to be an advantage that the United States maintains its hegemony as the world's largest importer of products, where its foreign purchases have been boosted by the fiscal stimulus packages launched to offset the effects on the American economy after the pandemic.

For this reason, border cities are able to attract investments to continue supplying production close to this potential demand.

Of interest: December holidays will further increase the demand for logistics space

Another relevant factor is the downward adjustments that we monitor during 2021 in these markets, which have been closing their gaps, with which they reported 4.2% in Monterrey, 0.6% in Tijuana, 1.9% in Ciudad Juárez and 4.5% in November. in Saltillo, a clear sign of strong demand for these entities.

Nearshoring has been playing a fundamental role for the demand of the northern markets to report record figures in 2021, especially from manufacturing companies that find in the Mexican market an ideal one to establish themselves due to its proximity to the largest market in the world, high volumes and low costs of labor, infrastructure, trade agreements, among others.

2022 will be a period of great challenges and opportunities to carry out business on Mexican soil with the condition of maintaining a climate prone to investment.

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