McKinsey sees US$78bn potential for Mexico nearshoring

Global management consulting firm McKinsey & Company is forecasting up to US$78bn in foreign direct investment by 2032 in Mexico thanks to the nearshoring phenomenon, but only if certain investments in infrastructure are made. 

“Our projection to 2032 is that this could almost imply [FDI] in Mexico of US$78bn in the most positive scenario, although for me, there is no doubt,” partner Miguel Ángel Alcaraz said during a forum hosted by urban development council Conared on Friday.

“This is happening; the question I constantly ask myself is if we will take advantage of its full potential. But there is no doubt investments are landing in the country already,” Alcaraz said. 

While the forecast might seem high, deputy finance minister Gabriel Yorio told BNamericas that the federal government has estimated that some US$65bn in 174 investment plans has been confirmed so far this year.

Alcaraz, whose firm is readying a new study on the matter, also said the relocation of companies in the country could demand up to 62Mm2 in industrial park space by 2032, which will translate into US$48bn for the sector. Of that, McKinsey estimates that US$25-40bn could go to construction alone. 

Nearshoring has created demand for 2.5Mm2 of industrial space in 2023-24, according to the Mexican association of private industrial parks (AMPIP).

McKinsey’s findings indicate that nearshoring will impact areas such as industrial parks, including the purchase of land; urbanism, including housing; transport, including highway, border and port infrastructure; and energy, including generation and transmission. 

Urban development

During the event, several speakers talked about the importance of prioritizing construction and financing for urban development projects to handle the nearshoring boom, especially in the country’s north that is capturing most of the investments. 

For example, Conared has approached US vehicle manufacturer Tesla, which in March confirmed the construction of a US$5bn gigafactory in Santa Catarina in Nuevo León state, to help it draft an urban development plan aligned with its innovative vision. 

“We had a meeting with Tesla… if they want to have such an innovative plant, then they should have an innovative city and implement good urban development practices,” Conared technical secretary Louise David said during the event. 

Conared was created in 2021 to promote and help plan smart urban development projects focused on transport solutions, housing, green energy and technology.

On Friday, the council presented its two new commissions, one oriented towards financing and project investment and the other towards railway projects. The latter will be led by David Camacho Alcocer, former director of railway regulator ARTF.