Assessing North America's Nearshoring Momentum
By Miriam Acuña, NCF24 Fellow; Chief Economist - GBM
In recent years, nearshoring in the region has begun to materialize, driven by the close trade relationship between Mexico, the United States, and Canada and the new global trade dynamics. However, political changes in the U.S. and Mexico could curb the speed at which this opportunity unfolds in the coming years.
The most frequent question investors have asked us recently is where we can see that the nearshoring effect is already happening. From Mexico’s perspective, while the country clearly emerges as a natural contender for nearshoring —given its multiple free trade agreements, specialized manufacturing powerhouse, enviable demographic position, and savings capacity—, an analysis of core nearshoring-related data continues to show positive momentum:
Mexico’s trade relationship with the U.S. has continued to strengthen. Indeed, Mexican exports to the United States in the nearshoring-related categories surged by ~US$18 billion in the last twelve months. Meanwhile, exports from China to the United States in the same categories have plunged, making the substitution process evident.
Mexico’s production capacity is in expansion, as two main indicators attest: 1) investments in machinery and equipment, which remain well above pre-pandemic levels, and 2) imports of capital goods, which, as a leading indicator of the manufacturing activity, is following a seemingly unbeatable trajectory, showing growth rates close to 20% over the last year. Also, the manufacturing sector has increased its contribution to Mexico’s GDP, while employment in the activity has maintained a steady uptrend.
While foreign direct investment (FDI) has remained relatively stable, sectors directly linked to nearshoring have experienced significant growth.
Commercial credit still exhibits an encouraging trend across regions in nominal terms, even amid tight monetary conditions.
Nearshoring sentiment across companies remains optimistic, especially in those engaged in the export sector.
Despite the latter, it is worth highlighting the challenges the opportunity faces in the months to come.
New administration proposals: The proposals put forward by President-elect Claudia Sheinbaum indicate a positive shift toward private investment and nearshoring. Nonetheless, certain bills set to be discussed in Congress (including the judicial reform) and the upcoming U.S. presidential election could delay potential investments.
USMCA review. The first joint review of the USMCA is scheduled for July 2026. While all three countries are expected to ratify the agreement, some thorny issues, like the U.S. concerns over the Mexico-China relationship, will set the tone for the negotiation.
Thus, the following months will be critical to evaluate the potential impact of nearshoring on the region. Overall, this trend presents a promising outlook, as it could provide an additional boost to the region’s GDP in the next decade; however, certainty is key for the process.
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