Mexico Factory Exports Surge by most In Over Four Years

April 22, 2014

The recovery of Mexican factory exports in the first quarter of 2014 signals a rebound of the country’s economy after nearly four years of stagnation. Since the start of 2014, auto shipments have surged. Auto manufacturing in Mexico, one of the country’s major bright spots, is set to once again advance against competitors in the forthcoming cycle. As Latin America’s number two economy, Mexico is an emerging market to watch.

Mexico’s status as an emerging market is largely reliant on export of manufactured goods. The U.S. is currently accountable for almost 80% of manufacturing in Mexico. The recent increase of manufacturing in Mexico coincides with expansion of non-oil manufactured exports, which saw a 5.07% increase in February.

The recent growth stint is the highest Mexico has experienced since 2008, say economists. The future of manufacturing in Mexico is critical to the emerging market. The country’s economy hinges on trade with the neighboring United States. Better than moderate growth across major sectors is expected in the next decade.

Mexico’s economic recovery follows losses in 2013 when industrial production ground to a halt. Recuperation of the services sector after a four-year low, reinvigorated predictions that the country would continue on the path to a robust recovery. In Q1FY14, Mexico reported a $431 million trade surplus adjusted for seasonal shifts; a moderate figure in comparison with non-seasonally adjusted terms, reporting the country’s trade surplus to be about $976 million.

Recent analysis of Mexico’s information technologies manufacturing sector for near-source outsourcing capacity by Mexico’s I.T. confederation, CANIETI, indicated that the country is progressing toward economic solutions in IT manufacturing. In a study conducted by Gartner, Inc., Mexico placed third behind two other emerging markets, India and the Philippines in global ranking of engineering capacity.

The two studies reflect number of students graduating from engineering programs. Mexico’s engineering degree programs are interdisciplinary in approach. Many programs are now focusing on new technologies, yet the goal of creating optimum diversification in training in one uniform systems is posing some challenge as traditional engineering programs attempt to establish a stronger bridge with IT specialization.

Priorities in IT engineering cited as recommendation to programs support demands within the domestic market. Artificial intelligence, robotics, simulation, and 3D printing are areas where Mexican engineers are more likely to compete in the global marketplace. Robotics ranks as the top priority for Mexico’s engineers. Robotics engineering is essential to the manufacturing and oil sectors. The economic effect of the robotics sector will be significant if Mexico moves ahead with such a plan.

Artificial Intelligence used in consumer products, like voice-recognition systems, are examples of digital engineering that could rapidly advance Mexico’s position in the electronics trade. Mexico’s graphics capacity is already well acknowledged. The promotion of 3D technological innovation offers the country’s manufacturing industry another angle on manufacturing in the soft goods segments. The combined automation of robotics, artificial intelligence and 3D efficiencies in manufacturing is a substantial model that will promote Mexico’s dominance over China’s current labor-cost advantage.