While fierce debates about tariffs and immigration policy rage on to the north, both issues are already leaving their mark on the Mexican manufacturing landscape — mostly, it seems, for the better.
Mexico’s preferential status under the United States-Mexico-Canada Agreement (USMCA) has made it a safe haven from the high tariffs experienced by its global competitors, leading to record-breaking foreign investment and a growing demand for labor. Stronger immigration enforcement in the U.S., meanwhile, has meant that more skilled Mexican workers are staying or returning to the Mexican workforce to supply that need.
But how do manufacturers take advantage of this evolving labor pool? Through careful consideration of its nuanced and dynamic geographical distribution. Workers returning from the U.S. or graduating into the workforce are being absorbed into the particular regions that support their skillsets and maximize their opportunities. Manufacturers looking to expand into Mexico will need to evaluate these same factors to ensure that the site they select aligns with their unique needs and objectives. Below is a three-point checklist for doing just that.
Does regional talent align with the product? The various regions of Mexico are attracting different kinds of workers. Monterrey, Tijuana, Ciudad Juárez and other northern border cities are seeing large numbers of returnees with experience in automotive subassembly, welding, CNC machining, machinery repair and logistics operations — many of whom acquired their skills in U.S. light manufacturing and warehousing. Central Mexican locales like Querétaro, Guanajuato, and the broader Bajío are receiving technicians who have worked in U.S. aviation services, electronics refurbishing and third-party logistics operations. Workers in construction, food processing, agriculture and select energy or transport fields, meanwhile, are gravitating toward Southern Mexico.
Each concentration of talent brings its own unique advantages. The north is particularly suitable for advanced manufacturing due to experience with complex machinery and electro-mechanical assembly; Central Mexico offers workers with exposure to strong compliance requirements, many of whom may already have key certifications; and the south is ideal for logistical infrastructure projects and investments linked to the Interoceanic Corridor of the Isthmus of Tehuantepec (CIIT).
Before choosing a locale, manufacturers should make a detailed list of the non-negotiable skills they will need, then measure that list against the labor profile of each region. A manufacturer of electric-vehicle charging equipment, for instance, may specifically need power-electronics expertise. So while a site in Puebla may grant access to many skilled workers in automotive assembly, Monterrey’s pool of electrical engineering and metal fabrication talent supplies something the manufacturer simply cannot go without. The particular requirements of the product — not just incentives, labor costs, or geography — make Monterrey the superior choice.
Will the labor supply last? A manufacturing site is a long-term investment. It can be tempting to select whichever locale has the largest, most skilled workforce at this instant and move along with the process. A scrupulous investor, however, will need reason to believe that the current conditions of the labor market will be sustained or improved in at least the decade to come. Manufacturers should therefore do thorough research into the plentiful available data on Mexican labor once they have begun to narrow down their options.
ANUIES and SEP reports on annual engineering and technical graduates, giving a multi-year forecast of skilled workforce entrants. CONALEP and the state technical training centers track operator-level manufacturing pipelines; INEGI’s demographic forecasts on population growth, age distribution and urbanization add nuance to the labor profile. and state labor ministries document investment announcements and skill-development programs that may strengthen the workforce.
Collectively, these datasets can paint a detailed picture of where a particular labor market is headed. Say that a plastics processor is considering Guanajuato; upon deeper research into the region’s long-term workforce pipeline, it finds find that the state will graduate upward of 10,000 technicians annually for the next decade, and is currently investing in new polymer and materials-science laboratories. With a steady flow of skilled entrants and industry-specific educational investments, the plastics processor can commit to Guanajuato with the confidence its their labor supply will be consistently replenished for the next decade and beyond.
Does the ecosystem complement the workforce? Even a skilled and sustainable workforce will be limited by an underdeveloped, overcrowded or mismatched industrial ecosystem. An established cluster of vertical and horizontal operations ensures that local workers have direct, relevant experience while granting access to existing infrastructure, shared resources and reduced logistical overhead. Too immature an ecosystem will lack these benefits, while one that is near capacity limits the labor supply and can lead to inflated wages.
Manufacturers should map out the practical requirements they face throughout their product pipeline, from supply to production to delivery, then look for an ecosystem that minimizes their overhead on every front. Such a search should include any upstream producers in the area, highway or railway access, local training centers, nearby competitors and so forth.
One excellent example of a mature industrial ecosystem is the Querétaro Aerospace Cluster, which includes more than 100 companies. Training programs at local universities are tailored to avionics, composites, aerostructures and certification requirements as a result. Shared machining suppliers, testing labs and quality-assurance centers have also been established to serve the hub. A new aerospace machining shop entering the Querétaro cluster will find a specialized workforce and the infrastructure they need to ramp up production in months rather than years.
Mexico’s labor force is rapidly evolving in a positive direction. U.S. immigration dynamics are making Mexico more and more attractive to the nation’s own skilled workers and, by extension, stretching its competitive appeal for nearshorers across the globe. Still, turning that opportunity into an advantage requires careful study of a complex geographical distribution. Only when talent, pipeline and ecosystem align with the needs and objectives of the venture will manufacturers get all that the Mexican workforce can offer.
Jorge Gonzalez Henrichsen is co-chief executive officer of The Nearshore Company.