Bordering on a Boom: Mexico Manufacturing Builds a Future

Volume 15, Number 1
First Quarter 2013

photo of an airport terminalIn recent decades, the world has witnessed Mexico's evolution into a manufacturing powerhouse. For instance, it is now the leading exporter of BlackBerry smartphones, flat-screen televisions, and refrigerators. The country also boasts growing automobile and aerospace industries.

In the first-quarter issue of EconSouth, Atlanta Fed staffers Galina Alexeenko, Ed English, and Stephen Kay discussed some of the contributing factors to Mexico's manufacturing ascendancy. Among them are free-trade agreements, of which Mexico has more than any other nation. Increasing labor costs in China and an appreciation of that country's currency since 2005 have also made Mexican manufacturing more competitive, the authors wrote.

Other factors supporting Mexico's status as a leading manufacturer include the availability of highly skilled workers, as well as its geographic proximity to the world's largest market, the United States. Indeed, "for companies that produce for the U.S. market, Mexico has become a more attractive manufacturing base than Asia," the authors noted.

To learn more about the rise of Mexico's manufacturing sector, as well as its integration with U.S. manufacturing, read the full article in EconSouth. The first-quarter edition is available in print or online.