Five Themes set to Shape Mexican Manufacturing in 2025

Mexican manufacturing is in a complex position moving into 2025, says Jorge Gonzalez Henrichsen, CO-CEO of the Nearshore Company.

From growing geopolitical tensions to industry diversification to greater Industry 4.0 adoption, the sector is in a state of flux and transformation. 

Below, Jorge shares his five key predictions of what we can expect to see. 

The position of Mexican manufacturing in 2025

Mexico’s export of goods to the US more than tripled from US$136bn in 2000 to US$475bn in 2023, making it the single biggest supplier to the largest economy in the world.

Evidently, Mexican manufacturers have much to look back on as they prepare to turn the page on the century’s opening quarter.

Geopolitical tensions and global pandemics have galvanised a nearshoring phenomenon that remains in its infancy by most accounts—recent elections notwithstanding—and which has opened a new gateway to the North American market: Mexico. 

If manufacturers have learned anything from the past 24 years, however, it is that looking back will only take you so far.

Forces both new and old are gathering to leave their mark on Mexico’s manufacturing scene.

Those who wish to ride these tailwinds will need to keep their eyes on the most crucial topics and stories as they develop. 

1. Labour supply

The US manufacturing sector is expected to see a labour shortage of 2.1 million positions by 2030. Fewer Americans are entering the manufacturing job market each year and the cost of labour remains high. Mexico, meanwhile, is steadily producing a skilled pool of workers via the nation’s extensive STEM programs—and labour costs are a fraction of the US equivalent. In fact, hourly rates in Mexico are now 30% lower than even those of China.

As such, Mexico is likely to see continued investment from the US and beyond in search of skilled and affordable labour. Areas in the south of Mexico where labour costs are even lower than in the industrialised north will have particular appeal for this reason, although reshoring manufacturers will need to weigh that benefit against longer supply lines. No matter the region, the labour pool and its growth will remain a central talking point throughout 2025.

2. Industry diversification

Once primarily centred around the manufacture of textiles, automobiles, and agricultural equipment, the Mexican manufacturing industry has experienced radical diversification in recent years. Its aerospace and medical sectors are already well established forerunners on the global stage.

Complex electronics manufacturing has now also begun to shift from its heavy concentration in Southeast Asia and especially Taiwan—given that 92% of the world’s advanced microchip manufacturing capacity is concentrated in a region under threat of war—and Mexico is a primary benefactor.

The broadening spectrum of industries is expected to bring foreign investment from entirely new sources and pave the way for yet more manufacturers both upstream and downstream on the supply chain. Industry diversification will only become a more prominent theme of discussion as these changes take shape and leave their mark on the manufacturing market.

3. Industry 4.0

Artificial intelligence and the internet-of-things technologies are transforming the face of manufacturing all around the world, and Mexico is hoping to take centre stage. The nation’s pool of talented, STEM-educated engineers has allowed many of its manufacturers to begin the implementation process without delay. Indeed, Mexico’s automation and industrial controls market—estimated at US$5.47bn in 2024—is projected to reach US$7.97bn by 2029 with a CAGR of 7.8% over that timespan

About 34% of Mexico’s automotive industry is already deemed “advanced” by the International Trade Administration, which also lists appliances, medical devices, pharmaceuticals, and electronics among industries that are seeing rapid advancement. Reshoring manufacturers will only propagate this trend. The progression in manufacturing technology will, in turn, bolster Mexico’s position ahead of its global competitors.

4. Risk

Global pandemics, supply-chain breakdowns, armed conflicts, and mounting geopolitical tensions have left manufacturers around the globe weary and wary of intercontinental supply lines.

As a result, logistical risk is becoming a primary theme in discussions that have hitherto been concerned only with cost-effectiveness. Manufacturers want supply chains they can rely on.

Mexico happens to offer both low-cost and low-risk logistics, courtesy of its proximity to the US market. As such, companies from all over the world that are looking to simplify their supply chains and centralise operations near the destination market will continue to flock toward Mexico. Even companies who are unwilling or unable to relocate entirely may slowly expand toward closer shores in order to hedge their bets.

Another risk on the horizon is Trump's anticipated tariffs.

Mexico's President, Claudia Sheinbaum, has expressed confidence that Trump's tariffs won’t be imposed, even recently stating, "We don’t expect it will happen. But if it does, we have our plan."

President Sheinbaum makes the right assessment—these tariffs are unlikely, and even if some trade restrictions were to emerge, I highly doubt they will last long.

There is little to gain from tariffs, as neither American companies nor consumers would benefit.

The deep economic ties between Mexico and the US are too strong, and I am confident that decision-makers in Washington understand this reality.

My optimism is shared by the companies I work with—none of which have any plans to leave Mexico.

5. Workforce education

Mexico’s traditionally agriculture- and textile-centred manufacturing scene is shifting rapidly toward more complex goods, workforce education is emerging as a significant facet of market-development.

In-demand industries like electronic, aerospace, and automotive manufacture must all draw from a skilled-labour pool which they are on-course to outgrow.

Many companies are investing directly in training their workers to increase value added per capita.

He highlights this may be done internally or in collaboration with educational institutions.

In any event, workforce education is likely to emerge as another competitive factor among Mexican manufacturers while bolstering Mexico’s workforce at large.

The bottom line

Mexico has been at the centre of global manufacturing discussions for some time.

The themes that make up that discussion have never once ceased to shift and develop, and next year will be no exception.

Manufacturers will thus do well to keep their eyes and ears on the topics that will end up shaping Mexico’s landscape in 2025—and the five themes listed here are a very good place to start.

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