Covid-19 has affected the whole world and it did not spare the manufacturing industry. However, surprisingly, many companies have adapted to these changing circumstances by understanding that evolution is and always has been the only constant in their line of business.
Mexico, with a land mass of over 1.9 million km2, is the fourteenth largest country in size, and is strategically positioned as a gateway to the North America and Central and South America markets. Its Federal Republic consists of 32 states, with high concentrations of economic activities within its three major metropolitan areas.
According to CONCAMIN (Confederacion de Camaras Industriales de los Estados Unidos Mexicanos), the Bajío-Centro Occidente region is at the forefront of Mexico’s industrial development and its transition to the new era of digitalization and industry 4.0 or as we would say here in Mexico, a transition from manufacturing to mentefattura or “mind-manufacturing”.
The federal government and local jurisdictions are striving to restart the country’s economic growth to generate jobs that its population requires and the well-being they aspire to achieve. It is important to remember however, there can be no growth without investments and that there will be no investments without good faith.
Last June, manufacturing companies were allowed to fully resume their operations. This happened without major shocks to the system. Global supply chains, however, suffered the impact of non-homogeneous restrictive measures and policies which were in place by different countries in order to contain the spread of COVID-19. The sensitivity of the global supply chains to disruptive events of such a sizable magnitude is one of the important lessons that the manufacturing industry in Mexico, North America, Italy, Europe has learned. Sectors such as automotive, aerospace, pharmaceutical, electronics, textiles, footwear, mining and other related ones have been characterized as having a high degree of global integration while their supply chains have been exposed to high level disruptive risk.
The T-MEC trade agreement known as USMCA in the USA and CUSMA in Canada, will be good for Mexico if the country learns how to take advantage of new opportunities. In order for Mexico’s industry to benefit from the agreement, thes government has to enact policies that will encourage innovation, SME digitization, inclusion in the North American supply chains, the development of skilled workforce and fiscal investments within these infrastructures.
T-MEC updates and modernizes what was previously known as NAFTA, allowing for the joint market to capitalize on the experiences held within the last quarter of a century. Mexico will surely succeed in taking advantage of this evolution of the North American economic partnership which will allow this new tool in helping it to foster greater industrialization of all member countries and further integration amongst them.
There will be challenges. Ones of note are those posed by the rapid evolution of industry within the developed world economies that are progressing fully towards digitalisation (IIOT, robotization and automation, AI), changing their energy models which require sustainability and environmental conservation, to mention only a few.
According to Lorenzo D. Berho, President of the Mexican Association of Private Industrial Parks (AMPIP), “...At the beginning of this period there was a lot of confusion in the sector, with the expectation of understanding What it (COVID-19) was. However, after three or four months of the health crisis, we realized how resilient the manufacturing sector is ”. From his point of view, Lorenzo D. Berho believes that the manufacturing sector will continue to be the most important engine in Mexico’s economy, and therefore industrial real estate will also continue to grow. Especially now that the economy relies on various sectors - which constitutes an opportunity - such as mining, energy, tourism, manufacturing and agro-industrial components. Not to mention those service sectors such as logistics and e-commerce.
Finally, Mr Berho stresses out that "in the field of production of goods our country has done an excellent job in recent years, but it is perhaps at this moment that the best opportunity presents itself for this sector to be the most relevant in Mexico’s future. Not only in the short term, but also in the medium and long term. It is up to us to know how to take advantage of this opportunity".
To summarize, using the famous song, The Times They Are Changing, Mexico and its economy are definitely well positioned for a better and more robust future.
Mexico, with a land mass of over 1.9 million km2, is the fourteenth largest country in size, and is strategically positioned as a gateway to the North America and Central and South America markets. Its Federal Republic consists of 32 states, with high concentrations of economic activities within its three major metropolitan areas.
According to CONCAMIN (Confederacion de Camaras Industriales de los Estados Unidos Mexicanos), the Bajío-Centro Occidente region is at the forefront of Mexico’s industrial development and its transition to the new era of digitalization and industry 4.0 or as we would say here in Mexico, a transition from manufacturing to mentefattura or “mind-manufacturing”. The federal government and local jurisdictions are striving to restart the country’s economic growth to generate jobs that its population requires and the well-being they aspire to achieve. It is important to remember however, there can be no growth without investments and that there will be no investments without good faith.
Last June, manufacturing companies were allowed to fully resume their operations. This happened without major shocks to the system. Global supply chains, however, suffered the impact of non-homogeneous restrictive measures and policies which were in place by different countries in order to contain the spread of COVID-19. The sensitivity of the global supply chains to disruptive events of such a sizable magnitude is one of the important lessons that the manufacturing industry in Mexico, North America, Italy, Europe has learned. Sectors such as automotive, aerospace, pharmaceutical, electronics, textiles, footwear, mining and other related ones have been characterized as having a high degree of global integration while their supply chains have been exposed to high level disruptive risk.
The T-MEC trade agreement known as USMCA in the USA and CUSMA in Canada, will be good for Mexico if the country learns how to take advantage of new opportunities. In order for Mexico’s industry to benefit from the agreement, thes government has to enact policies that will encourage innovation, SME digitization, inclusion in the North American supply chains, the development of skilled workforce and fiscal investments within these infrastructures.
T-MEC updates and modernizes what was previously known as NAFTA, allowing for the joint market to capitalize on the experiences held within the last quarter of a century. Mexico will surely succeed in taking advantage of this evolution of the North American economic partnership which will allow this new tool in helping it to foster greater industrialization of all member countries and further integration amongst them.
There will be challenges. Ones of note are those posed by the rapid evolution of industry within the developed world economies that are progressing fully towards digitalisation (IIOT, robotization and automation, AI), changing their energy models which require sustainability and environmental conservation, to mention only a few.
According to Lorenzo D. Berho, President of the Mexican Association of Private Industrial Parks (AMPIP), “...At the beginning of this period there was a lot of confusion in the sector, with the expectation of understanding What it (COVID-19) was. However, after three or four months of the health crisis, we realized how resilient the manufacturing sector is ”. From his point of view, Lorenzo D. Berho believes that the manufacturing sector will continue to be the most important engine in Mexico’s economy, and therefore industrial real estate will also continue to grow. Especially now that the economy relies on various sectors - which constitutes an opportunity - such as mining, energy, tourism, manufacturing and agro-industrial components. Not to mention those service sectors such as logistics and e-commerce.Finally, Mr Berho stresses out that "in the field of production of goods our country has done an excellent job in recent years, but it is perhaps at this moment that the best opportunity presents itself for this sector to be the most relevant in Mexico’s future. Not only in the short term, but also in the medium and long term. It is up to us to know how to take advantage of this opportunity".
To summarize, using the famous song, The Times They Are Changing, Mexico and its economy are definitely well positioned for a better and more robust future.