Mexico City — Six of Mexico’s states saw job creation surge in the first quarter of 2023, and which are experiencing a boost from nearshoring and the arrival of foreign investment in the country.
Mexico registered a record in the creation of formal jobs in the first quarter of 2023 for the period in question since records began, according to data from the Mexican Social Security Institute (IMSS).
In the first three months of the year, just over 423,000 formal jobs were created nationwide, 45% of which were created in six states: Jalisco, Baja California, Guanajuato, Chihuahua, Coahuila and Nuevo León, the latter being the leading state in job creation.
Nuevo León, which borders Texas, registered 47,540 new formal jobs between January and March 2023, an amount that exceeds all the employment generated by eight states in central and southeastern Mexico: Yucatán, Tabasco, Hidalgo, Oaxaca, Tlaxcala, Campeche, Veracruz, Chiapas and Veracruz together created 39,048 jobs.
Formal jobs created in the first quarter of the year represented the highest figure for a similar period since 2001, according to the Economy Secretariat of Nuevo Leon, which said 40% of the jobs were generated by the manufacturing industry, 32% in the services sector and 13% in construction.
Some of the states with the highest employment generation are among the five that received the highest foreign direct investment (FDI) to end-2022; after Mexico City, Nuevo León was the second state with the second highest investment, with $4.39 billion, Jalisco received $2.89 billion in FDI, Baja California $1.87 billion and Chihuahua $1.87billion.
In 2022, foreign companies began to relocate factories and production centers to Mexico, which, as a neighbor of the United States, offers lower costs and shorter lead times compared to manufacturing centers located in Asia.
As a result of this relocation, during 2022, 99% of the relocation of production centers, a process known as nearshoring, was captured by 13 states, but Nuevo León is the state that captured 50% of those relocations, followed by Coahuila and Chihuahua, according to GBM, taken from the Maquiladora and Manufacturing Export Industry Index.
Nuevo León state is set to become one of the states in Mexico that will benefit the most from nearshoring thanks to the existence of a diversified manufacturing industry, as well as its proximity and connectivity with the United States, S&P Global said on March 15, in a note in which it confirmed the state’s credit rating of ‘mxA’ which implies strong debt repayment capacity.
S&P Global, which revised Nuevo León’s outlook to positive from stable, said its rating reflects the recent investment announcement made by Tesla for the construction of an electric car factory with an estimated investment of between $4.5 billion and $10 billion in different stages over the next few years.
Tesla, which will soon announce the laying of the first stone in the municipality of Santa Catarina, where the Gigafactory will be built, has already published on its website the first vacancies to start the development of the plant in Nuevo León and in the following months more hirings are expected.