Nearshoring lives on: Despite economic uncertainty, the flow of fresh capital into Mexico is on the rise

After overseas nonstop concern deed a grounds precocious earlier this year, Mexican authorities celebrated. Additional information present shows that a increasing information of those funds are caller investment, alternatively than established companies reinvesting profits — a promising motion for Mexico’s economy.

The “new” concern constituent of Mexico’s grounds archetypal 4th FDI accrued by an encouraging 165% compared to the archetypal 3 months of past year, the Economy Ministry (SE) reported.

Economy Minister Marcelo Ebrard reported past Thursday that FDI successful Mexico totaled a grounds precocious US $21.4 cardinal successful the archetypal 4th of the year, an yearly summation of implicit 5%, but helium didn’t supply details specified arsenic wherever the wealth came from and which sectors successful Mexico the concern went to.

Ebrard didn’t uncover however overmuch of the archetypal 4th FDI was caller concern either, lone saying that the summation successful overseas concern meant that Mexico received “more reinvestment and much superior … done each avenues.”

The SE and the Bank of Mexico (Banxico) subsequently published further information connected archetypal 4th FDI.

New concern information is wide considered to beryllium an important gauge connected however good Mexico is doing successful capitalizing connected what has been described arsenic a “once-in-a-lifetime” accidental to pull overseas concern amid the nearshoring inclination arsenic it shows however overmuch caller capital  overseas companies — including ones with nary erstwhile beingness successful Mexico — are bringing into the country.

Mexico sees record-breaking US $21.4B successful archetypal 4th FDI

In 2024, caller overseas nonstop concern totaled $3.17 billion, accounting for conscionable 8.6% of full FDI successful Mexico, down from 13% successful 2023.

Reinvestment of profits by overseas companies with an existing beingness successful Mexico contributed $28.71 cardinal to FDI successful Mexico successful 2024, accounting for 77.9% of the total.

The remainder of the grounds precocious $36.87 cardinal successful FDI past twelvemonth — 13.5% — came from loans and payments betwixt companies of the aforesaid firm group.

New concern much than doubled compared to Q1 2024, but was inactive a tiny percent of full FDI 

Banxico information shows that FDI successful Mexico totaled $21.37 cardinal successful the archetypal 4th of 2025, up from $20.13 cardinal successful the aforesaid play of past year.

A full of $1.58 cardinal successful caller concern flowed into the state betwixt January and March, representing an summation of 165% compared to the archetypal 4th of 2024.

Thus, caller concern accounted for 7.4% of full FDI successful Mexico successful the archetypal 4th of 2025. While this percent is much than treble the 3% publication caller concern made to FDI successful the archetypal 4th of past year, it is inactive debased — and beneath the caller concern proportionality of FDI crossed 2024.

The fiscal work assemblage attracted 24% of FDI successful the archetypal 4th of the year, arsenic funds flowed into foreign-owned banks similar BBVA and HSBC. (File photo)

Alfredo Coutiño, manager for Latin America astatine Moody’s Analytics, noted that adjacent with the 165% year-over-year increase, caller concern inactive lone makes up a tiny proportionality of full FDI.

“The accomplishment of caller FDI continues to beryllium precise poor,” helium said.

For its part, the Economy Ministry focused connected what it called a “significant betterment successful caller investment” successful the archetypal 4th of the year.

“In an planetary discourse that presents challenges to pull investment, economical stability, a bully concern environment, competitory advantages and the ineligible certainty that commercialized and concern agreements supply person allowed Mexico to stay arsenic 1 of the preferred concern destinations astatine an planetary level,” the SE said.

Much of the archetypal 4th FDI successful Mexico was made and/or planned earlier the afloat grade of United States President Donald Trump’s early-second-term protectionist docket was known.

It remains to beryllium seen what interaction Trump’s on-again, off-again tariffs volition person connected FDI successful Mexico successful the 2nd 4th of the twelvemonth and crossed 2025.

Lion’s stock of Q1 FDI was reinvestment of profits 

Of the $21.37 cardinal successful FDI successful Mexico successful the archetypal quarter, $16.64 cardinal — 77.9% of the full — was reinvestment of profits by overseas companies with an existing beingness successful Mexico. This investment, which declined 15% connected a year-over-year basis, indicates that companies that already person acquisition operating successful Mexico person capable assurance to proceed investing successful the country, contempt the assorted challenges they face.

At $3.14 billion, loans and payments betwixt companies represented 14.7% of full archetypal 4th FDI successful Mexico. This constituent of FDI accrued a whopping 3,086% summation compared to the archetypal 4th of 2024.

US remained the apical overseas capitalist successful Mexico 

The Economy Ministry reported that 38.7% of archetypal 4th FDI successful Mexico — astir $8.3 cardinal — came from the United States. The United States’ percent of FDI and its full concern magnitude are down from 52% and $10.61 cardinal successful the archetypal 4th of 2024.

The adjacent biggest sources of overseas concern successful Mexico successful the archetypal 3 months of the twelvemonth were:

• Spain: $3.2 billion, representing 15% of the total.
• Netherlands: $1.8 billion, representing 8.3% of the total.
• Australia: $1.2 billion, representing 5.7% of the total.
• Germany: $800 million, representing 3.7% of the total.

Though the United States was inactive the superior root of overseas nonstop investment, the publication of U.S. investors was importantly little than past year. (Economy Ministry)

The SE said that 42.4% of full archetypal 4th FDI came from the United States and Canada, “showing the spot of economical relations successful the USMCA region, and the interdependence of trilateral economical growth.”

More than 80% of FDI went to conscionable 5 states 

The Economy Ministry reported that 83.9% of archetypal 4th FDI went to conscionable 5 national entities, of which Mexico City received the highest proportion.

• Mexico City received $11.8 billion, representing 55% of Mexico’s archetypal 4th FDI total.
• Nuevo León received $2.7 billion, representing 13% of the total.
• México authorities received $1.9 billion, representing 9% of the total.
• Baja California received $900 million, representing 4% of the total.
• Guanajuato received $700 million, representing 3% of the total.

More than 40% of FDI went to the manufacturing sector 

The SE reported that Mexico’s immense manufacturing assemblage received $9.2 cardinal successful FDI successful the archetypal 4th of the year. That fig represents 43% of full FDI successful Mexico betwixt January and March. The dollar magnitude is 8.2% higher compared to the archetypal 4th of 2024, portion the manufacturing sector’s stock of full FDI was 1 percent constituent higher than a twelvemonth earlier.

The SE said that “automotive assemblage trends” — “specifically” those related to “electric transport,” arsenic good arsenic electronics and energy procreation trends, could pb to “greater” concern successful Mexico moving forward. It noted that those sectors are “supported” by the national government’s “Plan México” economical initiative.

After manufacturing, the sectors that received the astir FDI successful the archetypal 4th of 2025 were:

• Financial services: $5.2 billion, representing 24% of the total.
• Mining: $2.2 billion, representing 10% of the total.
• Commercial (including retail): $1.3 billion, representing 6% of the total.
• Construction: $700 million, representing 3% of the total.

Mexico News Daily