A Manufacturer In Mexico Remains Top Choice For Near Shoring
A recent survey conducted by AlixPartners concludes that Mexico remains the #1 destination of choice at 50%, by CEO’s who seek to procure any Manufacturer In Mexico serving American production interests. Even in the face of 35% of C-level executives who prefer manufacturing business stay in the U.S., the 50% proclivity for Mexico manufacturing continues to overshadow China’s earlier claim as having an offshore manufacturing advantage. In fact, as China and other developing markets redirect their own capacity for local consumption instead of exporting, 34% of the same CEO’s predicted the reliance on Mexico’s near shore advantage to continue.
Adding to the attractive manufacturer in Mexico allure are the increased production costs in China and other parts of Asia, as well as the shipping and time factors generated by Asia’s distance. AlixPartner’s managing director, Foster Finley, indicated that even with the “impressive rebound” of America’s manufacturing sector, Mexico’s lower labor and freight costs, speed-to-market and trading advantages still position them as the first near shore choice. Indeed, 37% of C-level executives surveyed continue to expect ongoing cost advantages from Mexico manufacturing, up from 34% from the previous year, and 26% cited lower inventory costs as the largest single advantage to date. “While total cost parity certainly doesn’t exist today, the gap between manufacturing in North America and in places like China has narrowed dramatically…” said Alix Partners’ Russ Dillon; this even in the face of Mexico’s security situation which was mostly unchanged from the previous year at 43%.