Manufacturing in Mexico has developed a lot thanks to the international factors and number of essential benefits of businesses. Global conflicts and trade wars has forced a lot of businesses to move their business and manufacturing elsewhere. Under such a situation, Mexico has risen as a popular location for several reasons. Here are some of the benefits of manufacturing in Mexico:
Proximity to United States and Canadian Markets
Rather than setting your manufacturing halfway around the globe, Mexico provides a manufacturing location for both the United States and Canadian Markets. With NAFTA in place, quick transportation and distance are an appealing selling point to any companies thinking to operate in Mexico.
Less shipping rates and short lead time
As United States shares border with Mexico and has a well-developed infrastructure, quick turnaround times for shipping is easily achievable. Orders can pass the border within hours and specialized orders may just take some days. In comparison to Asian nations, which may take weeks or months for production and transportation. Using a truck, you can reach most of the US destinations within one day’s time. Also, this saves a lot of your cost.
Low labor cost
Labor cost in Mexico is alluring as factory workers are paid way less than American workers. Workers in Mexico work at an average of $2 per hour while in America average income of a worker is $12 per hour.
The manufacturing wages are considered to be good-paid jobs in Mexico.
- In the present scenario, Mexico minimum wage rate is $5 for an 8-hour work.
- Just 0.5% of the total workers claim to get a wage of $16 per hour.
The Mexican weekly work hours is 48 hours in comparison to the US where it is just 40 hours. All this makes manufacturing in Mexico extremely cost saving and feasible.
Educated workforce
You can get high quality workers at reasonable rates in Mexico. The workers who are trained and hold knowledge to work in specific categories are paid well. The workers with experience in manufacturing fields such as medical devices, automobiles, auto parts, plastic, appliances and electronics earn well here. With 200 aerospace companies here employing 200,000 people, the employment rate is high.
The country is making amazing improvement in education, training, higher studies, health and job market of its citizens. It boasts of a literacy rate of 93 percent ensuring that most of the workers are educated and trained here.
Foreign investment growth
After the BIP started in Mexico in 1965, the nation started courting foreign investment. Apart from America, Europe and Asia have also caught on the benefits of manufacturing in Mexico. Automobile brands carry out a major portion of their automotive manufacturing in the southern border.
If you want to see the case of how foreign companies see Mexico, you don’t need to go ahead than the transformation of Guadalajara. The industrial property Guadalajara is called the Silicon Valley of Mexico because of the major role it plays in research and development. It also has a booming manufacturing scene and has over 1/3rd of their gross domestic product coming from its industrial property alone.