Strength of the Mexican industrial sector - Oradel
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11 November, 2020

Strength of the Mexican industrial sector

While the halt in activities caused by the pandemic had a negative impact on most industries, the industrial sector showed positive activity, accelerating and becoming the focus of interest for the diversification of real estate portfolios.

The Mexican industrial sector is composed of two key components, light manufacturing and logistics, both of which showed significant progress since the COVID-19 pandemic caused a serious disruption in the supply chains, creating the need for more distribution points in other geographical locations. 

In addition, with respect to the logistics sector, the pandemic accelerated the adoption of e-Commerce. in the second quarter of the year, online sales were twice as high as in the last eight years. 

e-Commerce has undoubtedly caused an increase in the demand for industrial space, since it requires three times more warehouse space than traditional commerce, as well as areas for last mile delivery. However, even before the pandemic, the Mexican industrial sector had been quite solid, which is due to a series of factors, among them, proximity to the United States, the main commercial market, as well as the highly qualified labor force and competitive costs available in the country. 

According to Ricardo Álvarez, Sales & Solutions at Ryder Mexico, the standard of quality of the facilities is very high, since the industrial buildings that are operated in Mexico are at the same level as those in other countries such as the United States and Canada.

This is due to investments by the United States since the 1990s that required the infrastructure of logistics and manufacturing spaces to advance in terms of quality and technology. 

Furthermore, the entry into force of the United States-Mexico-Canada Agreement removed much of the uncertainty that some companies had, which had decided to postpone their investment in Mexico, as well as those already operating in the country since the USMCA provides guarantees and there is interest in sending capital to the country’s industrial sector, not only from North America but also from Asia and other parts of the world. 

The current challenge is for the government to work on promoting investment and allocating more resources to energy infrastructure, which is essential for the development of new projects.

In the long term, industrial parks are expected to be strengthened by three factors: nearshoring or relocation of manufacturing plants, the resilience of supply chains, and e-commerce. 

Oradel Industrial Center, located in Nuevo Laredo, Tamaulipas offers competitive advantages for companies seeking to establish their manufacturing and logistics operations in the US-Mexico border. The industrial park has rail services and it is only 10  miles away from the international bridges to the United States.

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