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Made In Mexico: Nearshoring Is Accelerating Growth

Made in Mexico: Nearshoring Is Accelerating Growth

Made in Mexico: Nearshoring Is Accelerating Growth

Equity Insights offers research and perspectives from Putnam’s equity team on market trends and opportunities. Reshoring and nearshoring are key trends for investors in global markets. As geopolitical tensions escalate and more businesses shift operations away from China, investors are considering the impacts of deglobalization. For many businesses and regions, we believe it could drive meaningful growth, with Mexico as one of the biggest beneficiaries. In our view, Mexico stands to benefit from both reshoring — businesses moving their manufacturing back to their domestic markets, and nearshoring — businesses moving manufacturing to regions that are closer to their headquarters. Executives are planning to increase investments in Mexico Nearshoring to Mexico is still in its early phases, but we continue to see positive developments beyond already announced investment and expansion plans. In a survey of companies operating in Mexico, the Central Bank of Mexico found that a significant percentage of corporate executives are planning increased levels of investment. This includes expanding production, hiring more staff, and renting more real estate as a result of nearshoring opportunities.

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Daisie Hobson

Daisie Hobson is a Director at the Reshoring Institute and an engineer with many years of experience in manufacturing and project management.

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