In the first six months of 2024, private companies announced plans for more than US $45 billion in investment in Mexico, according to the federal Economy Ministry (SE).
The SE said in a report that private — mainly foreign — companies made 143 investment announcements for Mexico between Jan. 1 and June 30.
In those announcements, companies outlined plans to invest a total of $45.46 billion in Mexico, with just over half of the money earmarked for manufacturing projects.
The SE said it expects the money to flow into Mexico in the next two or three years.
The amount private companies have committed to invest in Mexico so far this year exceeds the total foreign direct investment (FDI) in Mexico in 2023, by more than $10 billion.
Mexico’s FDI totaled $36.06 billion in 2023, while companies made investment announcements last year that together amounted to $110.74 billion.
Where will Mexico’s new investment come from, and where will it go?
The SE said that United States companies made investment announcements for Mexico totaling $21.94 billion in the first six months of the year. That amount accounts for 48% of the total investment announced from January to June.
German companies committed to investing $6.79 billion in the country, or 15% of the total, while Argentine firms announced plans to invest $4.39 billion, or almost 10% of the total.
U.S., German and Argentine companies together accounted for just under three-quarters (73%) of the more than US $45 billion total investment announced for Mexico between Jan. 1 and June 30.
The SE said that 53% of the $45.46 billion is destined for the manufacturing sector.
Projects to build beverage, automotive, auto parts, and iron and steel plants accounted for 85% of the $24.23 billion in manufacturing investment announced to June 30.
Based on the investment announcements made so far this year, the next biggest recipients of capital inflows will be the following sectors:
- Commerce: earmarked to receive $6.87 billion, or 15% of the total
- Transport: $5.13 billion, or 11% of the total
- Mass Media: $4.96 billion, or 11% of the total
- Construction: $2.08 billion, or 5% of the total
- Energy: $1.33 billion, or 3% of the total
Among Mexico’s 32 federal entities, Querétaro is set to be the biggest recipient of investment announced by companies in the first six months of 2024. Just over $6.35 billion, or 14% of the total investment, is destined for the Bajío-region state.
The next biggest recipients will be:
- México state: $4.68 billion, or 10% of the total
- Nuevo León: $4.12 billion, or 9% of the total
- Puebla: $2.64 billion, or 6% of the total
- Coahuila: $2.1 billion, or 5% of the total
Over half of the investment (52%) is earmarked for just seven states — the five listed above plus Sinaloa and Aguascalientes.
Three-quarters of the investment announced so far this year will go to 15 federal entities, while the other 17 will share the remaining 25%.
How many jobs will the new investments create?
The SE said that 62,940 new jobs are expected to be created as a result of the $45.46 billion in investment announced so far this year.
Just over 45% of that number — more than 28,400 jobs — are expected to be concentrated in the automotive sector, Mexico’s top earner of export revenue.
More than 8,000 new jobs are expected to be created in Coahuila, more than any other state. The northern border state is set to receive just 5% of the total investment announced between January and June, but 13% of the jobs created from that investment will be concentrated there, according to the SE.
San Luis Potosí and Nuevo León are slated to be the next biggest beneficiaries in terms of job creation, with 8,048 and 5,757 positions, respectively, expected to be added.
What were the largest Mexico investment announcements between January and June?
The largest investment announcements for Mexico in the first five months of 2024 were those made by:
- Coca-Cola bottler and convenience store owner FEMSA: $9.96 billion.
- Amazon Web Services: $4.96 billion.
- DHL Supply Chain: $4 billion.
FEMSA, the owner of the Oxxo chain of convenience stores and 17 Coca-Cola bottling plants in Mexico, among other assets, said in February that its outlay would go to “organic growth initiatives in our key businesses.”
Amazon Web Services announced in February that it would open a cluster of data centers in Querétaro.
Incoming economy minister: investment climate in Mexico is “very good”
Marcelo Ebrard, who will be the nation’s economy minister in the incoming administration to be led by Claudia Sheinbaum, noted on Tuesday that between January and June, private companies committed to invest “around $46 billion” in Mexico.
“It’s a very high figure if it’s compared with what has historically been the rate of foreign investment in Mexico,” he said, adding that the investment announced is not just for projects in the north and center of the country but for the south as well.
Mexico’s southern states have been historically ignored by investors in comparison to the nation’s other regions.
“… The investment climate we have is very good, perhaps the most optimistic we’ve seen so far this century,” Ebrard said.
Mexico News Daily
