Manufacturing industry expected to close 2020 without any impact

Industrial parks require advanced technology for better efficiency
18 December, 2020
USMCA to support manufacturing industry
18 December, 2020

Manufacturing industry expected to close 2020 without any impact

In the first half of the year, exports, investments and jobs in the manufacturing and maquiladora industries plummeted. However, the sector estimates that it will close the year without being affected, that is, recovering the levels that existed before the emergence of the virus.

According to Luis Aguirre Lang, President of the National Council of the Maquiladora and Manufacturing Export Industry (Index) for almost three months, 80% of the 3 million workers in the manufacturing industry were in confinement, which affected the sector, but growth was restored in July.

The impact of the pandemic on global value chains and maquiladora and manufacturing companies was undoubtedly large, with exports falling by 50% in May and 41% in April. 

However, after the reopening of the country’s trade, by June exports stood at 19 billion dollars and in July they were 20 billion dollars.

Even though the stated figures were 9% below their respective months of last year, Aguirre Lang highlighted that they are favorable indicators, since if this continues, the industry’s exports will close the year at the same level as in 2019, which was 279 billion dollars.

With regard to Foreign Direct Investment (FDI), he indicated that it registered a 30% drop in the first half of the year reaching 18 billion dollars. However, investments of at least 3 billion dollars were generated for the second half of the year. 

Investment for the manufacturing industry

The suspension of non-essential economic activities in April and May halted 45% of the almost 6,300 production plants of the Manufacturing, Maquiladora and Export Services Industry (IMMEX). After overcoming the crisis caused by COVID-19, it is expected that this sector will generate investments of 3.7 billion dollars and 100,000 new jobs within the next few months. 

According to Aguirre Lang, the export industry is currently running its operations as usual, for which efforts and large investments have been made to comply with national and international health protocols.

In addition, the importance of manufacturing lies in the 64 billion dollar trade surplus that it reached in 2019 when it exported a value of 270 billion dollars, 80% of which went to the United States. 

The importance of the USMCA

Both the manufacturing industry, the export sector, as well as the Government of Mexico consider that the new Treaty between the United States, Mexico and Canada (USMCA) will contribute to the economic recovery of the new normal that is being experienced worldwide. 

Similarly, it is expected that the current global situation and the USMCA will attract value chains to Mexico from companies in Asia and Europe that are looking to enter the North American market. 

Oradel Industrial Center offers the best alternative for the manufacturing and logistics industries. It is located only 10 miles from the US-Mexico border. The park offers class A industrial buildings for immediate occupancy.

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