Narayan AmmachchiMexican bank Grupo Financiero Banorte is set to hire 800 people, reflecting the growing demand for credit in Mexico as US manufacturers reshore operations from China.
Banorte’s Chairman Carlos Hank Gonzalez told Reuters that the bank is preparing to capitalize on the nearshoring trend.
Wage hikes in China are gradually eroding the Asian country’s appeal as the world’s manufacturing hub, leading American firms to relocate factories closer to home.
American electric car maker Tesla, for example, recently announced plans to build a multi-billion dollar plant in northern Mexico.
A recent Capterra survey found that 88% of American small and medium businesses look for suppliers in the US or Mexico. The nearshoring trend is also evident in statistics on Mexico’s goods exports to the US, which saw a 20% increase in the first 10 months of 2022.
Mexico appears to be significantly more appealing than China. It has a free trade deal with the United States, plus its labor is less expensive than the Asian country’s. Workers in Mexico’s industrial sector earn US$4.80 per hour, compared to $6.50 per hour in China, according to consultant Alixpartners.
With supply chain woes being one of the main drivers of US inflation, nearshoring in manufacturing is likely to increase in the coming months.
The new employees Banorte is hiring would support foreign companies setting up shop in Mexico, its chairman told the newswire.
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