Focus: FDI

Pass it On

Pass it On

Jul. 10, 2013

Year-on-year growth represents a 14% increase compared to 2012 and the highest amount received in the first quarter of any year since 2007. Demonstrating a full recovery from the global financial crisis, the US was the top FDI generator, occupying a 49% share of the total amount. Germany, Japan, and Spain have been the other top investors so far in 2013.

Figures released by the Secretariat of Economy track the investments of over 765 foreign companies that reported to the National Registry of Foreign Investment. Studies show that the majority of FDI is flowing into the advanced manufacturing sector, which received 65% of the $4.99 billion invested between January and March 2013.

In an interview with TBY, Francisco N. González Díaz, CEO of ProMéxico elaborated, “Mexico has proven it is ready to support more innovation and high-technology activities," adding that, “The goal is to seize this opportunity and further the competitiveness of these industries, attracting even more foreign investments that foster our supply chain." Other industries that ProMéxico seeks to highlight for future FDI are the automotive, auto parts, aerospace, IT, electric-electronic, medical devices, and renewable energy segments of the economy. The real estate sector has enjoyed considerable success since 2009, when foreign investors looked toward Mexico as a more affordable alternative.

Although many analysts were concerned by the 34% decrease in FDI in 2012 after seeing $21.5 billion in 2011, there is strong evidence that the market is on the upswing once again. In early 2013, the Banco de México revised its previous assessment that 2012 attracted $12.6 billion to the higher figure of $13.43 billion, although other sources put the figure at $12.7 billion. Of geographic areas that international companies see the most potential in, the state of Nuevo León stands out from the competition. According to Rolando Zubirán Robert, Undersecretary of Foreign Investment and International Trade at the Secretariat of Economic Development in Nuevo León, the state “has been rated by the OECD as the most productive state in Mexico, the most competitive by IMCO, and the most productive by KPMG. We have been the highest receiver of FDI for the past six years." The state's logistical advantages make it a region to watch for both domestic and international investors.

Meanwhile, Mexican companies invested over $25 billion overseas in 2012, more than double the $12.1 billion recorded in 2011. Large overseas investors from Mexico include large companies such as América Móvil, Grupo Bimbo, chemicals and plastics company Mexichem, and flour and tortilla producer Grupo Maseca. In terms of individuals seeking to make property investments abroad, “Mexican real estate investors have analyzed the possibility of making investments in Europe," Jorge A. Castañares Moreno, Business Director of Aguirre Newman Mexico, told TBY.

While Mexico's diverse and resilient economy will likely continue to attract FDI into a variety of industries, expanding businesses and growing individual income will be key in the increased amount of investments Mexicans make abroad.