Before COVID-19, the outlook for industrial sector developers was positive, as they had announced a greater demand in every industry, such as the logistics, distribution, manufacturing, auto parts and e-commerce sectors.
According to Claudia Ávila Connelly, Executive Director of the Mexican Association of Industrial Parks (AMPIP), the revival of all industrial sectors will depend on the distribution of inputs across the country and the world, as well as recovering the jobs lost.
The logistics sector will undoubtedly be one of the first sectors to recover due to its interdisciplinary nature. Moreover, even if market demand is reduced, production will not disappear, especially in essential industries.
According to the latest quarterly industrial report from the consulting firm Solili, the logistics-based industrial sector is on the rise and this has positively affected this infrastructure’s market demand rates.
The report highlights that the current demand comes from logistics, retail and transport companies looking for strategic locations with the appropriate infrastructure to develop their activities and that are close to the final consumer, thus reducing delivery times and transportation costs.
Pablo López Gallardo, Information Analysis Director at Solili, indicates that these areas will benefit from an increase in demand, and therefore a decrease in manufacturing is expected while the logistics sector should see a boost in the remaining markets, which could stabilize the industrial sector.
The lockdown has generated a great deal of growth in the logistics and e-commerce sectors’ storage space in industrial warehouses. However, this demand is expected to fall in the long term, although not to the levels prior to the pandemic.
In addition, as far as demand is concerned, Gallardo states that they expect a downturn in demand in the coming months due to the cessation of activities in sectors such as the automotive industry.
As a result, they expect a downturn in all industrial sectors, mainly in Mexico’s manufacturing centers where the downturn will affect domestic industrial markets for the next six months.
By the end of this year, or in early 2021, an upturn is expected as a result of companies relocating from China to Mexico in order to supply the United States.
Oradel Industrial Center is an important hub for companies that want to establish manufacturing and logistics operations in the US Mexico border. It offers taylor made industrial buildings at a strategic location only 10 miles from the US border crossing.