Mexico's manufacturing sector has had a strong start to 2024. The confidence index surpassed a 10-year high, while purchasing managers' indices (PMIs) and expectations indicators improved in February. Manufacturing PMIs from both S&P Global and Mexico's Institute of Statistics and Geography stood solidly above the growth threshold of 50, reaching 52.3 and 53.45 respectively. Manufacturing production value reached MXN 10.8tn, just below the all-time high set in 2022 (MXN 11.2tn) and well above the MXN 8.6tn figure for the pre-pandemic year of 2019.

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This robust performance was supported by nearshoring from the United States. Mexico's relatively stable economy and its trade pact with the US and Canada incentivize companies based in its northern neighbours to shift some operations south of the Rio Grande. Nearshoring has been a key source of foreign direct investment in Mexico, with manufacturing being the key beneficiary. In 2023, foreign investment in Mexican manufacturing rose 28% in dollar terms from a year earlier, pushing the sector's share to 52% of total FDI inflow.~

This trend helped make Mexico the largest US trading partner last year, pushing China to second place for the first time in 15 years. The US imported goods and services from Mexico worth USD 476bn in 2023.

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