Apparel Sector to Get Boost from Mexico’s Signed Sedeco Agreement
October 9, 2013
Growing textile industry benefits Manufacturing in Mexico and U.S., providing ample jobs to fuel Mexican economy and lower labor costs for American companies.
October 09, 2013 – With a myriad of textile companies making the move to manufacturing in Mexico, the industry as a whole has exploded into something that wasn’t even expected by forecasters. As such, this has become beneficial not only to the Mexican homeland, but to the United States as well, providing ample jobs in which to fuel the Mexican economy while lowering labor costs for U.S. companies. It appears to be a win-win situation for corporations looking to move to Mexico, the Mexico textile industry in particular playing a major role.
The Secretary for Economic Development (SEDECO) of the Federal District of Mexico, Solomon Chertorivski Woldenberg and the President of the National Chamber of the Apparel Industry (CANAIVE), Sergio Lopez de la Cerda, signed a cooperation agreement in August establishing a strategic alliance that fosters development and strengthens the competitiveness of Mexico’s apparel industry. As stated by SEDECO’s Secretary, “the partnership aims to launch training and education projects as well as integration of production chains and microcredit financing mechanisms to encourage schemes that will boost the industry.” Beyond the scope of fueling employment in this area, the apparel industry will continue representing a “driver” of the local economy as it becomes one of the most dynamic sectors in Mexico.
In related U.S. relevancy, contract manufacturers are expanding their production facilities due to the sheer number of American companies that are taking advantage of Mexico’s “superior manufacturing services.” American companies that hire contract manufacturers to make many of their products’ components in Mexico have been expected to benefit tremendously from this export boom, due to the manufacturers’ help in bringing their products to market expeditiously and inexpensively. This is courtesy of Mexico’s high-quality labor force and some manufacturing plants’ proximity to the U.S. “Mexico is in a strong position to be a significant winner from shifts in the global economy,” said Boston Consulting Group (BCG) senior partner Harold L. Sirkin. “That is good news not only for Mexico, which relies on exports for around one-third of its GDP, but for America since products made in Mexico contain four times as many U.S.-made parts on average as compared to those made in China.”
The garment industry accounts for 10-percent of all manufacturing in Mexico output, while one in five apparel companies in the nation call Mexico City their home. Further, the apparel industry remains the fifth highest value generator in the Federal District, with a record of more than 500,000 companies formally registered with the Mexican Social Security Institute (IMSS) – generating approximately 33,000 direct jobs and 100,000 indirect jobs.
Mexico City will be hosting the Latin American Fashion Week this year.