Index projects investments of 14,000 million dollars in IMMEX companies in 2022

The National Council of the Maquiladora and Export Manufacturing Industry (Index) of Mexico projected that investments in the sector will amount to 14,000 million dollars in 2022.

The estimated figure represents a growth of 19.8% year-on-year and a record, by exceeding the all-time high of 11,687 million reached in 2021.

But Luis Manuel Hernandezpresident of the Index, added that this growing trend would be interrupted next year, when it is expected to attract investments in a range of between 5,000 and 9,000 million dollars.

“Investment is expected to drop next year, but that will be worldwide,” Hernández commented at a virtual press conference, and gave the high inflation forecast in the United States for 2023 as an example of the adverse global environment.

From 2015 to 2020, the companies of the Maquiladora and Export Manufacturing Industry (IMMEX) invested an average of 8,000 million dollars annually.

Through the IMMEX program, producers of goods for export or companies that provide services for export can temporarily import various goods exempt from the general import tax and, if applicable, from the payment of antidumping or countervailing duties, to be used in the production of export products.

They can also obtain a tax credit of 100% of the Value Added Tax (VAT) and/or the Special Tax on Production and Services (IEPS).

This program continues to be of great importance for Mexican trade: during the 2016-2021 period, an average of 55.8% of exports and 43.3% of imports were made by beneficiary companies of the IMMEX. The main exports and imports were electrical machinery, appliances and material.

Hernández commented that some investment projects are pending the conclusion or the direction that the dispute in energy matters that Mexico, the United States and Canada will take due to certain policies applied by Mexico, which, among other aspects, benefit Pemex and the Federal Electricity Commission (CFE).

He also highlighted that Mexico is facing greater competition from economies such as Taiwan, India and Singapore, as well as from Vietnam, where plants have been relocated from China to lower their costs and to avoid tariffs from US customs.

Meanwhile, Hernández added, the US government “is preparing” the southern United States to compete with Mexico, although this has already happened on other occasions.

More than new projects, around 80 to 90% of the investments that have arrived in Mexico this year were allocated to the expansion of production plants.

The IMMEX companies employed 3 million 263,778 people last September, the most recent data available, and Hernández projected that the sector will close the year with an increase of 183,000 more jobs compared to the December 2021 figure.

roberto.morales@eleconomista.mx