Nearshoring: A Major Source of Jobs in Mexico

Banamex, the Mexican full-service bank, has conducted an analysis of the electronics, aerospace, medical disposables, and electronic medical equipment industries, all of which contribute to capital-intensive sectors that are integrated into global supply chains and are primarily oriented toward exports to the United States.

Banamex notes that the relocation of supply chains—or nearshoring—boosted employment in high-value Mexican manufacturing; however, it emphasizes that there was a lack of geographical distribution of productive activity, as the concentration in cities along the northern border and in the Bajío region was reinforced.

The study shows that the share of regions such as the northern border and the Bajío in estimated employment in sectors linked to reshoring has increased from 85.6% to 86.6%, while the share of the southern and southeastern regions declined from 2.2% to 2.1%.

But, the report from Banamex's Economic Studies department concludes that nearshoring has not yet found a way to redistribute productive activity, as it concentrates it in the existing hubs.

The financial institution notes that nearshoring is not classified as an official statistical category; therefore, the sectors serve as an indirect indicator of results but does not allow for distinguishing between facilities established through relocation and those that were already in operation.

On the other hand, it has been reported that employment in these sectors combined rose from 1.51 million people previously to 1.76 million, representing a 16.6% increase compared with the 7.4% growth recorded in the rest of the manufacturing sector.

However, Banamex attributed the persistence of existing regions to a skilled workforce, supplier networks, infrastructure, and proximity to the United States—advantages that reinforce one another and make it difficult for investment to spontaneously shift to regions that are lagging behind.