Although the Mexican business sector remains optimistic about prospects for 2025, political and economic challenges muddy the overall panorama, according to a survey conducted by consulting firm KPMG.

According to the survey, 80% of nearly 700 executives believe sales will climb this year, but only 59% expect to make new investments in 2025. This is down 11 points from last year when 70% of those surveyed said they planned to make new investments in 2024, according to the newspaper Milenio.

The survey — Perspectives of Top Executives in Mexico 2025 — found that executives are wary of disruptive political events (particularly the changes in government in both Mexico and the United States) as well as potential trade and geopolitical conflicts.

Among the challenges: new U.S. President Donald Trump has threatened to impose tariffs on Mexican goods imported to the U.S. while also suggesting that he might lower corporate income taxes to 15%.

The first proposal could impact nearshoring growth for Mexico, while the second proposal is part of Trump’s stated strategy to make the U.S. a more attractive place for manufacturing investments.

Even so, those surveyed believe Mexico is well-positioned to take advantage of nearshoring.

“Mexico has a variety of positive factors,” said KPMG associate Ricardo Delfín, according to the newspaper El Economista. “There is a good balance between cost and quality, as well as a qualified labor force … and executives still believe [nearshoring] will positively affect their operations.”

Four out of five executives believe their company’s sales will improve in 2025 and 89% think companies will thrive during the next three years (2025-2027).

However, according to the survey, 56% expect the Mexican economy to stagnate in 2025, while 24% predict a recession.

The KPMG analysis of the survey highlighted existing and potential supply chains — particularly in connection to Mexico’s proximity to the United States — and the country’s numerous free trade treaties as factors influencing executives’ outlooks.

Concerning potential new investments in 2025, nearly two-thirds of respondents (63%) emphasized meeting current clients’ needs, while 34% ranked nearshoring opportunities as a priority. Other investment targets would be environmental considerations and addressing exchange rate fluctuations.

El Economista said the study indicates that nearshoring strategies this year will likely be focused on seeking value chain alliances, modifying products and services, increasing installed capacity and investing in new geographical areas. 

Delfín said it is clear that executives will approach operational expansion cautiously primarily because a great deal of expansion has already taken place.

Other challenges noted in the survey include security concerns (45%), talent attraction and talent retention (37%), a slowdown in domestic consumption (35%) and the peso exchange rate (34%).

With reports from Milenio, El Universal, Reuters and El Economista