Steel Industry
3 min read
25 days ago

The Manufacturing Industry in Mexico Has Recuperated

Steel Industry

The Metalworking and steel industries constitute a fundamental piece of the revived productive structure of the manufacturing industry in Mexico in 2022. 

The current dynamism of manufacturing exports is strengthening employment statistics throughout the country. This rebound in the Mexican job market represents a critical factor in the country’s regional economic activity recovery in 2022.

According to the Bank of Mexico report on regional economic activity published on March 2, 2022, an increase in manufacturing orders throughout the country’s productive sector is reported. The results obtained suggest that the dynamism of non-automotive manufacturing exports has contributed to the recovery of consumption in the regions most linked to the external market.

The report details that the labor market index corresponds to the expectations regarding the number of workers employed by the manufacturing industry in Mexico for the next 12 months. An increase was registered in all regions of Mexico. These results are an improvement over the previous quarter and demonstrate employment gains for the last four consecutive reporting periods.

In the study, it is anticipated that during the remainder of 2022, economic activity in all regions will have a gradual growth trajectory.

In the last quarter of 2021, the manufacturing industry in Mexico experienced a moderate recovery. In this sense, after the declines that were registered in the previous three quarters, the manufacture of transport equipment, in particular, demonstrated a recovery. This was especially the case in the last month of 2021. It resulted from a partial improvement in the supply of industrial inputs. Nevertheless, despite this ameliorated environment, technical stoppages persisted by vehicle assemblers and companies engaged in the manufacture of auto parts.

Regarding the last quarter of 2021, statistics revealed that manufacturing activity registered modest expansion in all of Mexico’s productive centers, except for the North Central region.

Thus, the evolution of regional activity in the manufacturing industry in Mexico during the last quarter of 2021 reflected a certain recovery of the automotive industry in the north and central regions. This is the case, although production levels were lower than those observed before the start of the coronavirus.

The North Region Is Prosperous In The Metalworking Sector

The interviews conducted with business managers in the study mentioned above reveal that the dynamism of the economic activity of the United States of America and the effects of economic stimuli in Mexico will boost manufacturing activity in the latter country for the remainder of 2022. This will be particularly true in the country’s northern region.

In 2021, the country’s Northern region benefited from exporting manufactured goods, mainly machinery and equipment, metal products, ceramics, plastics, and cardboard. Regarding the manufacture of trucks, activity was supported by the greater availability of batches of microprocessors. The influx of these critical parts allowed companies to complete pending orders.

Indirectly, this situation also favored manufacturers of metal products, who could resume their shipments to customers in the automotive industry in the United States, who also received batches of microprocessors.

North Central Region Manufacturing Industry in Mexico is Reactivated

In the Bank of Mexico report, the manufacturing executives that were interviewed reported that for the Central-North Region, the limiting factors in 2021 were present in the electronics industry, especially given the difficulties in supplying inputs in the sector. In addition, there were significant logistics problems related to imports coming to them from Asia.

For instance, electric mower manufacturing company executives cited a shortage of specialized motors from their suppliers in the United States. This was because those US suppliers had problems procuring the needed supply of specialized components for their products and the necessary supply of steel from Asia.

On the contrary, in the transportation equipment subsector, executives in the manufacturing industry in Mexico highlighted the recovery in auto parts production during the last quarter of 2021. Specifically, the manufacturers of seats and their components, harnesses, and gasoline consumption systems indicated that this increase was due to the improved availability of semiconductors in the marketplace.

This boosted the electronics industry in Mexico since projects for the development of products for vehicles were, in significant part, resumed. Likewise, business intelligence indicated that demand for medical and telecommunications equipment destined for the United States from Mexican producers remained robust.

To learn how your company can benefit by being a part of the manufacturing industry in Mexico, contact the expert professionals at the Tecma Group of Companies.

Juan Arvilla

Director of Operations

Juan Arvilla

Director of Operations

Juan has worked in the maquiladora industry for more than twenty years. He has extensive experience in manufacturing, sourcing and materials planning.