Webcast 012 | Is Mexico the new China?

Rebecca Harding presents Carlos Sanchez Pavan and Shannon Manders to uncover the key trade drivers behind Mexico€™s strengthening supply chains. Mexico has been a strong beneficiary of re-shoring in manufacturing and the country’s strong economic and political structural changes have facilitated trade growth in automobiles, auto parts, oil and alternative energies. Delta Economics’ view is that Mexico and increasingly, the Latin American region, have growing competitive advantages over emerging markets in Asia and that China is becoming less competitive in wage and productivity terms, relative to Mexico.

 

Webcast 012 Author  |  Rebecca Harding  |  CEO

North America

Our regional forecast for 2014 export growth has dropped from 2.8% in Q4 2013 to 1.6% now. The United States will see its exports grow by a forecast 3% in 2014 which, compared to a net drop in Canada of -2.5% is positive. Its imports are forecast to shrink by around 1.9% during the course of 2014 and this reflects the reduced dependency that it has for imports on intermediate goods, particularly originating in China. Compared to Mexico, its drop is relatively small compared to 2013 (just 0.7%) suggesting a positive outlook for economic growth more generally. Mexico’s drop in forecast export growth reflects its status as an emerging economy and its dependency on trade with Canada and China in particular. All emerging economies at present are experiencing downward pressure on prices in order to remain competitive and this is reflected in the forecasts as well. Mexico is no exception.