Redwood MX Update: October 2024

This Month: A Tale of Two Presidents 

Welcome to Redwood’s Mexico Market Update for October 2024! As a US-Mexico cross-border specialist, Redwood publishes this report to look back at important news and trends from the previous month. From the general business mood and key economic data to transportation and investment news, the Redwood MX Update was created to keep you informed.  

October was a month of general economic uncertainty in Mexico. The country is attentively watching the moves of new President Claudia Sheinbaum, who took office on October 1. Sheinbaum takes the reins of a country strengthened by increased US trade and investment, but facing challenges. Mexico is also closely monitoring the results of the US presidential election, where the stakes are high as a Trump victory could bring new tariffs on all US imports.  

The Mexican peso continues to weaken, with the MXN/USD exchange rate averaging $19.88 for October. On November 1, the peso weakened further as the exchange rate was recorded at $20.29, a new yearly high. 

Diesel fuel prices in Mexico are fairly stable at an average of MXN $96.15 per gallon in October, down just slightly from the MXN $96.28 average price in September. The October price translates to $4.74 USD per gallon, much higher than the current price of diesel fuel in the US, which is about $3.58 per gallon. 

One of the most pressing challenges for Mexico’s new president is rising crime. Cargo theft rates are steadily growing, up 10% in September 2024 versus September 2023. Tuesdays and Thursdays saw the highest theft rates, accounting for 29% and 19% of weekly crimes, respectively. 58% of robberies occur at night. The states with the most robberies were EdoMex, Puebla and Veracruz, where 50% of stolen cargo was groceries. 

Count on Redwood to support you as you navigate these and other trends. We can help maximize the performance and return on your investments in Mexico, as well as the safety of cargo and personnel — no matter the economic climate.  

Transportation News and Challenges 

Nuevo Leon Expands Colombia-Laredo Customs Capacity 
The expansion of the Colombia-Laredo customs office in Nuevo Leon is under way. This infrastructure project will increase the number of export lanes from three to five. Daily border crossings at the customs office are expected to triple, cementing the Colombia-Laredo crossing as a key commercial route.  

Wage Increase of 62% Ends the US Port Strike 
The dockworkers of the International Longshoremen’s Association (ILA) and the United States Maritime Alliance (USMX) reached a preliminary agreement on October 3, quickly ending the strike that had temporarily paralyzed major ports on the East Coast and the Gulf of Mexico. The agreement includes a 62% wage increase over six years. The pay increase was lower than the 77% initially demanded by the union, but higher than the 50% offered by the USMX at the start of negotiations. 

US-Mexico Trade Reached $74B in August
Trade between the US and Mexico totaled $73.77 billion in August, an increase of 4% from August 2023, according to the latest data from the US Census Bureau. August marked the eighth consecutive month — and the 18th month out of the past 19 months — that Mexico has been the United States’ number-one trade partner. 

Sonora Records Nearly 40% Growth in Exports  
Over the past three years, the state of Sonora has realized growth of 39.76% in its exports, an increase from USD $5.6 billion in 2021 to USD $7.8 billion in 2024. The Governor of Sonora, Alfonso Durazo Montaño, notes that the state’s exports increased by 15.10% in Q2 2024. 

Investment Trends 

Foreign investments in Mexico continue to grow, according to MexicoNow. Here are some recent highlights.  

Based in China, Hofusan Industrial Park will invest USD $1 billion in Nuevo Leon for a new expansion focused on manufacturing and technology development. 

German appliance maker Bosch will invest USD $221 million to expand its facility in Aguascalientes. Avery Dennison, a US manufacturer of pressure-sensitive adhesive materials, will invest USD $179 million to build a new plant in Queretaro. JAC Mexico, a Chinese automaker, will spend USD $54 million to expand its facility in Hidalgo. And Japanese manufacturer Makino will invest USD $20 million in Queretaro for a new plant where it will make machine tools. 

Whether your plans include building a facility, investing in cross-border logistics or otherwise capitalizing on strong US-Mexico trade, Redwood has you covered. Learn more about our cross-border and international capabilities, or let’s meet in person to discuss your specific growth objectives and opportunities.