Construction and Nearshoring Drive Local Investment Surge in Mexico

Latin America’s second-largest economy is being propelled by companies setting up operations in to take advantage of access to the US market

Construction and Nearshoring Drive Local Investment Surge in Mexico
By Rafael Gayol
September 04, 2023 | 11:30 AM

Bloomberg — Mexico’s gross fixed investment rose the most in over two years in yet another sign the country is benefiting from the relocation of companies to tap the US market and from the government’s infrastructure plans.

Fixed investment, a measure of capital allocation that includes spending on factories and machinery, rose almost 29% in June compared to the previous year, its fastest increase since May 2021, the national statistics agency said Monday. Investment grew by 3.1% when compared to May, beating a 2.4% median estimate of analysts surveyed by Bloomberg.

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Latin America’s second-largest economy is being propelled by companies setting up operations in to take advantage of access to the US market, a process known as nearshoring. Construction investment grew 37% annually while investment in machinery and equipment rose almost 21%, according to Monday’s figures.

June’s fixed income data includes a methodological change by Mexico’s statistical agency moving the base year to 2018 from 2013.

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