COVID, investment both up in January

COVID-19

The COVID-19 pandemic continued to lash Mexico in January with no respite in sight.  The number of new cases and deaths reached historic highs during the month, and the country’s level of excess mortality ranked second highest in the world.  Mexico City and 13 other states remain at red on the epidemiological traffic light, signifying the highest level of restriction on economic activity and movement.  Hospital bed occupation in the capital is close to 90%, and only one of Mexico’s 32 states, Campeche, is at the green or lowest level of restrictions.  At this time, both President Andrés Manuel López Obrador and Carlos Slim, Mexico’s wealthiest man, are ill with COVID-19.

ECONOMY AND INDUSTRY

  • The Mexican Institute of Finance Executives (IMEF) projects the country’s economy will grow 3.5% in 2021. The mark would be terrific if it were not for the 9% contraction expected for 2020. (El Financiero, January 19, 2020)
  • The Mexican Automotive Manufacturing Association (AMIA) is projecting growth of 12% in light vehicle production this year, with a similar increase for exports. The group expects 24% growth in production of automotive parts. (El Economista, January 11, 2021)
  • Mexico registered a net loss of over 514,000 formal jobs in 2020, a contraction of 2.5%, according to the National Social Security Institute (IMSS). A trend toward recovery of employment in the second half of the year was interrupted in December as restrictions on economic activity were tightened due to a resurgence of COVID-19 cases. (Citibanamex Reporte Económico Diario, January 13, 2021)

ECONOMIC ACTIVITY OF NOTE                                                                                             

  • Industrial parks: Mexican commercial real estate developers E-Group and the government of the State of Mexico inaugurated a new industrial park in the central industrial city of Toluca, the state government reported.  The US$300 million site will host German multinational chemical consumer products manufacturer Henkel, among others. (Así Sucede, January 28, 2021)
  • Healthcare: The Mexico City government completed construction of a new hospital in the municipality of Tlalpan, local media reported.  City officials inaugurated the US$30 million health care center, which will initially provide attention to COVID-19 patients and subsequently be adapted to provide services in the areas of internal medicine, general surgery, pediatrics and obstetrics-gynecology. (Forbes Mexico, January 28, 2021)
  • Fuel storage: Mexican industrial group Grupo México and U.S. fuel producer Valero Energy will construct a fuel storage terminal in the central state of Aguascalientes, the Aguascalientes state government reported. The US$20 million site is planned to have storage capacity for 140,000 barrels of gasoline and diesel. (Reforma, January 27, 2021).
  • Railroad: U.S. rail freight operator Kansas City Southern (KCS) reported plans to begin construction this year on a new cross-border rail bridge between Laredo, Texas and Nuevo Laredo, Tamaulipas. KCS did not specify the cost of the additional bridge, which is projected to double the rail freight crossing capacity at the border site. (El Sol de México, January 27, 2021)
  • Television: U.S. streaming platform Netflix reported plans to invest approximately US$300 million in content production in Mexico. The company’s plans also include establishing its Latin American headquarters in Mexico City this year. (Reforma, January 26, 2021)
  • Aerospace: Canadian aerospace components manufacturer Dart Aerospace inaugurated a new production plant in the northern state of Chihuahua, local media reported.  The US$3.6 million facility is expected to produce flotation systems, landing gear and other components for helicopters. (El Heraldo de Chihuahua, January 22, 2021)
  • Automotive: Japanese auto maker Nissan announced plans to adapt its production plant in the central state of Aguascalientes to produce subcompact hatchback and SUV models.  The US$27.3 million modification comes on the heels of a US$93 million investment to ready the company’s manufacturing facility in the southern state of Morelos to produce the Frontier model of pickup trucks. (Expansión, January 20, 2021)
  • Logistics: Mexican commercial real estate developers E-Group will lead development of a major new intermodal logistics center near the new capital city international airport at Santa Lucía, currently under construction.  The US$1.2 site is planned to provide logistics infrastructure for rail, truck and air freight operations in the greater Mexico City metropolitan area. (Bnamericas, January 13, 2021)
  • Automotive: Indian automotive components manufacturer Motherson announced it will expand production capacity at its plant in the northeastern state of San Luís Potosí.  The US$32 million expansion will allow the company to boost output of products such as precision machined fuel pump parts and assembly of other metal and plastic automotive parts. (Líder Empresarial, January 14, 2021)
  • Manufacturing: Colombian bathroom fixture manufacturer Corona acquired a German-owned manufacturing plant in the northern Mexican state of Coahuila, the company reported.  Total investment was not specified for the acquisition of the plant, which will become the third in Mexico of Corona’s 28 production sites in the Americas. (La República, January 13, 2021)
  • Natural gas: U.S. liquefied natural gas (LNG) developer Mexico Pacific Limited (MPL) is currently developing a gas liquification plant in the northwestern state of Sonora at a cost estimated in the US$ billions, the company reported. The complex is projected to import gas from the United States for liquification and reexport to Asian markets beginning in 2025. (Reforma, January 5, 2021)
  • Leisure: Mexican multinational children’s entertainment center operator KidZania plans to open a new location focused on health and fitness in Mexico City this year via investment of approximately US$18 million. Despite the ongoing COVID-19 pandemic, the company also has two new locations under construction in the United States. (Reforma, January 4, 2021)
  • Automotive: Irvin Jaropamex, subsidiary of U.S. auto parts maker Irvin, inaugurated a new production plant in the northern state of Durango, the company reported. The US$11 million facility is planned to produce seat trim for a regional Ford vehicle assembly plant. (ATMS Magazine, December 23, 2020)
  • Industrial cooling: German precision cooling equipment manufacturer Stulz reported plans to maintain its investment level of approximately US$2.5 million in operational infrastructure in Mexico in 2021, despite the pandemic-induced economic slowdown.  The current boom in construction of data centers in Mexico drove sales growth of 19% for the company in 2020 with respect to the previous year. (El Economista, January 3, 2021)

 POLITICS AND SOCIETY

  • Mexico’s National Statistics Institute (INEGI) presented the results of its 2020 national census, setting the country’s population at 126 million. The population of the greater Mexico City area (Valley of Mexico) is estimated to be 21.8 million people. (Citibanamex Reporte Económico Diario, January 26, 2021)
  • Mexican President Andrés Manuel López Obrador advised that he tested positive for COVID-19 and is undergoing medical treatment. The president has been subject to criticism for traveling frequently to events around the country and refusing the wear a face mask. (Reforma, January 25, 2021)
  • Complications in U.S.-Mexico relations continued to worsen this month as new U.S. President Joe Biden took office. Mexico dropped charges against a former Mexican Defense Minister who had been arrested in the U.S. and returned to Mexico for prosecution, and the U.S. government protested against actions taken by the Mexican administration that would impede private foreign investment in the Mexican energy sector.  (Citibanamex Estudios Económicos, January 18, 2021)

Leave a Reply

Your email address will not be published. Required fields are marked *