Mexico Nearshoring Faces Mixed Signals
Despite ongoing security concerns, Mexico remains a top target for nearshoring investment. A CBRE survey found 83% of real estate investors plan to maintain or increase their Mexico investments in 2026, targeting industrial and logistics. Concurrently, Canadian trade delegations are working to establish deeper partnerships, though the recent abduction of mine workers highlights persistent operational risks.
- Foreign direct investment (FDI) in Mexico reached a record $40.9 billion in the first three quarters of 2025, a 14.5% increase from the same period in 2024. The manufacturing sector attracted the largest share of this investment, accounting for 37.1% of the total. - The Mexican government is actively encouraging nearshoring through incentives, including "Plan México," a $1.4 billion initiative offering tax deductions for investments in new fixed assets and workforce training. These incentives target key export industries such as semiconductors, automotive, and medical devices. - Investment in Mexico's industrial parks is projected to increase by nearly 37% in 2026, reaching over $5.8 billion. A significant portion of this investment is directed towards new park developments and expanding existing ones to meet the demands of nearshoring. - Despite strong investment figures, challenges such as cargo theft and water scarcity persist, posing risks to manufacturing operations. Violent cargo hijackings saw a 6% increase in the first ten months of 2023 compared to the previous year. - The upcoming July 2026 review of the United States-Mexico-Canada Agreement (USMCA) introduces a significant variable for manufacturers. The review could lead to negotiations on tariffs, rules of origin, and labor standards, creating uncertainty for long-term investment and supply chain planning. - In the lead-up to the USMCA review, the U.S. has imposed tariffs on certain goods, including a 25% tariff on steel and aluminum from all countries, including Mexico. However, over 84% of Mexico-U.S. trade remains tariff-free due to USMCA exemptions. - The industrial real estate market, particularly around Mexico City, is experiencing record growth, with gross absorption reaching 1.6 million square meters in 2025. Much of this demand is driven by pre-leasing activity, with 79% of new industrial developments being leased before completion. - Mexico has become the United States' top trading partner, with total trade nearing $930 billion in 2024. This strong trade relationship is a key driver of the nearshoring trend, with many manufacturing processes for a single product crossing the U.S.-Mexico border multiple times.
