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Nearshoring Statistics for 2024 Every Business Should Know

Since the pandemic, many businesses have begun to use the nearshore outsourcing method. We’ve compiled some useful nearshore statistics that can help you decide if you should use this method.
By
Jacob Lee
February 12, 2024
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Key Takeaways:

  • 92% of U.S. manufacturing executives have considered nearshoring
  • U.S. nearshoring could help grow Mexico’s economy by 3.5%
  • The largest sector in Mexico to see sales growth due to nearshoring is Textiles & Clothing, which has increased by 45%
  • $5.44 billion of U.S. investment goes to Mexico’s automotive sector

U.S. Nearshoring Statistics In the Western Hemisphere

Since trade relations between the U.S. and China deteriorated in 2018 and soon after the arrival of COVID-19 in 2020, numerous companies have been reviewing their outsourcing strategies. As a result, businesses are looking to nearshore their operations to the Western Hemisphere.

As evidence of this current trend, consider some statistics from a survey conducted by Kearney from 2021:

  • 92% of U.S. manufacturing executives had considered reshoring or nearshoring, a significant increase from the previous year’s 78%
  • Of these respondents, 47% had already conducted some nearshoring in the previous three years
  • 29% had decided to nearshore in the next three years
  • 16% were evaluating the prospect of reshoring their operations

As these numbers show, many businesses have considered nearshoring as their new outsource strategy. A new survey from the ABB Group reflects a similar trend. 

  • 70% of U.S. businesses are planning to change their outsourcing operations 
  • Of this 70%, around 37% plan to bring their production to the U.S.
  • 33% of U.S. businesses want to nearshore their business operations to a country that’s close by

Surveys conducted by Axios between the years 2020 and 2023 show how much nearshoring has grown in popularity amongst companies. In these surveys, supply chain leaders were asked if their companies took steps to implement nearshore production. 

Supply Chain Leaders Who Say They’ve Taken Steps To Nearshore

YearPercentage of Respondents That Took Nearshoring Action
202015 %
202111 % 
202217%
202342%

Provided by Axios

As the nearshoring data from Axios and other officials show, this outsourcing strategy is continuing to grow in popularity amongst various companies and industries.  

We have an article explaining how nearshoring works if you want to learn more about this method of outsourcing. 

U.S. vessels arriving at a Mexican port

Statistics On U.S. Nearshoring In Mexico

While there are many countries in the Western hemisphere where businesses can conduct nearshore operations, Mexico has emerged as the most popular. In 2023, Mexico surpassed China as the U.S.’s top trading partner. During this year, there was a demand in audits and inspections in Mexico that showed a +17% year-over-year growth.

It’s not quite known how U.S. nearshoring will impact this country, but there are some positive projections. 

  • The Mexican government expects U.S. nearshoring operations to grow the country’s economy by 3.5%. 
  • Manufacturing exports from Mexico are expected to grow from $455 billion in 2023 to $609 billion by 2028.
  • From January to November 2023, Chinese goods accounted for 13.9 % of U.S. imports, while Mexican goods accounted for 15%
  • Sectors that benefit from the United States-Mexico-Canada Agreement (USMCA) are expected to grow by $38 billion in the next five years thanks to nearshoring.

Although these are only projections, there are some findings that show Mexico has already received unique benefits from U.S. nearshoring operations. S&P Global has obtained some insightful statistics from a survey they conducted with 350 manufacturers in Mexico. 

Nearshoring Sector Growth 

SectorAmount of Sales Growth*
Textiles & Clothing45%
Coke & Petroleum33%
Leather & Leather Products31%
Wood & Wood Products28%
Paper & Paper Products27%
Chemicals & Pharmaceuticals25%
Transport Equipment25%
Electrical & Electronic Equipment23%
Mineral Products20%
F&D, Tobacco15%
Machinery N.E.C. & Repair15%
Other Manufacturing13%
Metals & Metal Products9.5%
Rubber & Plastics7%

Provided by S&P Global *percentages are approximations of large scale data

As U.S. nearshoring operations continue in Mexico, the country’s economy will only grow and manufacturers will see increased sales. Despite the economic expansion that’s already taken place thanks to this outsourcing method, the U.S. is only nearshoring in a few Mexican states. 

States In Mexico with Nearshoring Operations

Mexican StatesNearshoring Project
Nuevo León30
Coahuila17
Guanajuato10
Chihuahua5
San Luis Potosí3
Jalisco3

Provided by Deloitte

As nearshoring grows in Mexico, it’s likely that operations will spread out to other states in the country.  

Statistics On Foreign Direct Investment In Mexico

Foreign Direct Investment (FDI) will increase in Mexico as nearshoring operations grow. The U.S. sent $13.5 billion worth of FDI funds to Mexico, with $5.44 billion of it going to Mexico’s automotive industry in 2023

FDI funds for manufacturing have also risen in certain Mexican sectors between the years 2018 and 2023, as the following data shows.

  • Investment in the manufacturing of household appliances grew by 141%
  • FDI for the manufacturing of electric power equipment increased by 34%
  • Computer equipment investment rose by 10%
  • There was a 116% increase in investments for the manufacturing of iron and steel
  • Car and truck manufacturing investment grew by 13%

These statistics prove there’s a strong interest amongst U.S. companies in numerous Mexican industries.  

The Mexican flag

Why Nearshoring In Mexico Is Appealing To U.S. Companies

Compared to other countries in Latin America, there are a few reasons why Mexico is a more appealing place to outsource compared to China. For one, labor costs in Mexico are considerably lower. 

Chinese and Mexico Labor Costs (2016-2020)

YearChinese Labor Costs Per HourMexican Labor Costs Per Hour
2016$4.99$3.82
2017$5.21$4.16
2018$5.51$4.45
2019$5.78$4.66
2020$6.5$4.82

Provided by Statista

While many industries outsource to China, the costs to hire Mexican companies to perform the same tasks are slightly lower. Not only are labor costs cheaper in Mexico, but the workforce is reliable. 

According to ManpowerGroup’s Total Workforce Index (TWI), Mexico ranks in 9th place amongst 60 countries. The TWI also includes some additional data on the country’s workforce.

  • For productivity, the TWI gave Mexico a score of 0.70
  • In regulation, Mexico received a score of 0.72
  • The TWI gave Mexico a cost efficiency rating of 0.77
  • As for workforce availability, Mexico received a score 0.33

These metrics combined gave Mexico a total score of 2.50, with the U.S. having the highest score, 2.90. Another feature that makes the nation an appealing for nearshore business is due to how efficient it is to import from there to the United States. For one, shipping costs are much cheaper compared to China

  • It can cost around $15,000 to ship a 40-foot container from China to the West Coast. 
  • Prices for shipping a 40-foot container from China to the East Coast can cost $18,000
  • Shipping a 40-foot full-container load from Mexico to the West Coast will only cost between $2,480.60 and $2,741.72.

Manufacturing growth in Mexico has also made it an attractive place to conduct nearshoring. Here are stats on the development of certain sectors between the years 2018 and 2023. 

  • Manufacturing of electronic components has grown by 37%
  • Information technology (IT) equipment manufacturing has grown by 32%
  • Electrical accessories and equipment manufacturing has increased by 24%
  • Manufacturing of rubber products has increased by 24%

In addition to these benefits, rent for industrial space in Mexico is 15% less expensive than in China. With so many advantages present, it’s no surprise this Latin American country has become an appealing location for U.S. nearshoring. 

Statistics On Nearshoring Potential In Latin America

Mexico isn’t the only country where there’s nearshoring potential for U.S. companies. There are other nations in Latin America that have yet to be tapped into. According to a report released by the U.S. Chamber of Commerce and Ipsos, 99% of small to medium-sized enterprises (SME) and 93% of large companies find countries in the Americas appealing for logistics purposes.

Central America

 The Center for Strategic & International Studies (CSIS) has generated estimates on the projected gains Central American countries could experience thanks to U.S. nearshoring.

Projected Nearshoring Gains for Central America

CountryProjected Gains
Guatemala$436.4 Million
Belize $5.9 Million
El Salvador$686.4 Million
Honduras$745.1 Million
Nicaragua$473.3 Million
Costa Rica$918.1 Million
Panama$81.3 Million

Provided by the Center for Strategic & International Studies

Central American countries aren’t the only ones who will benefit from U.S. nearshoring. These nations and the United States also participate in the Central American Free Trade Agreement (CAFTA-DR). This will make it cheaper for businesses to import certain products. 

There are opportunities to build from the ground up as these countries look to take advantage of the current trade situation between the U.S. and China. Local governments are focused on making their nations appealing to large regional investors, especially those from places like the U.S. and Canada. 

South America

Due to its larger size and more established infrastructure, South America offers further opportunities for North American businesses and investors. Between available exports and rising manufacturing capabilities, significant growth is projected. 

Estimated Export Growth Due To U.S. Nearshoring In South America

Country Projected Value of Exports
Chile $1.82 Billion
Argentina$3.90 Billion 
Uruguay$528 Billion
Paraguay$251 Billion
Bolivia$125 Billion
Peru$1.41 Billion 
Ecuador$841 Billion
Brazil$7.84 Billion
Colombia$2.57 Billion
Venezuela$321 Billion
Guyana$400 Billion
Suriname $58 Billion

Provided by Bloomberg Linea

Similar to Central America, the U.S. has established different free trade agreements (FTA) with various nations in South America, including Chile. . 

An aerial view of a Caribbean port

Data On Nearshoring Potential In the Caribbean 

Not to me forgotten are the islands of the Caribbean. Though most people may only think of them as vacation destinations, there are a variety of other business opportunities if you know where to look. 

The current top candidates for nearshoring activities are the Dominican Republic and the U.S. commonwealth of Puerto Rico. 

  • 57% of the Dominican Republic’s exports are manufactured goods, and the country is continuing to grow their manufacturing industry.
  • 80% of global pharmaceutical companies have on-island investments in Puerto Rico. It currently serves as a pharmaceutical hub for U.S. and Canadian businesses. 

If U.S. companies conduct nearshoring operations in the Caribbean, it could also increase the amount of exports coming from some of these nations. 

Estimated Export Growth Due To U.S. Nearshoring In the Caribbean

Country Projected Amount of Exports
Dominican Republic$1.58 Billion
Hati$253 Billion
Barbados$61 Billion
Jamaica$139 Billion
The Bahamas$177 Billion

Provided by Bloomberg Linea

Unlike Latin America, nearshoring operations in the Caribbean would be exceptionally close to businesses and ports operating off the Gulf Coast. Additionally, the U.S. has different FTAs with countries in this region, such as the U.S. Caribbean Basin Trade Partnership Act and CAFTA-DR with the Dominican Republic.   

Unlock Your Nearshoring Potential with Product Distribution Strategy

The nearshoring statistics we’ve provided have revealed some useful insights that you can use to decide if this outsourcing strategy is a good idea for your business. If you choose to nearshore, then let Product Distribution and Strategy help with your logistics operations.

We can help you by offering these services: 

With our transportation expertise, we can help you with moving your goods and services from nearshore countries. Get started by filling out your consulting session, or call our team at (866) 989-3082 to learn more about the services we can offer. 

References

Richard Howell and Stephanie Overby, Evaluating Nearshoring? Here are Five Realities, Kearney, 2023

ABB Group, Surv: 70% of U.S. Businesses Eye Reshoring and Nearshoring Plans, 2022

Kate Marino, Share of Companies Nearshoring Their Supply Chain This Year — Survey, Axios, 2023

Qima, Nearshoring In Mexico On the Rise: Mexico Overtakes as US’s Leading Trade Partner, 2024

Time Doctor, Outsourcing To Mexico: Benefits, Challenges, Tips, 2023

Statista, Manufacturing Labor Costs Per Hour for China, Vietnam, Mexico from 2016 to 2020, 2024

ManpowerGroup, Total Workforce Index 2022 Global Analysis, 2022

Novalink, Is It Cheaper To Manufacture In Mexico Than In China?, 2023

Gail, Shipping From Mexico To USA: Procedure, Costs, and Customs, ExpatDen, 2023

Noe Torres, Mexican Businesses Warmed by Glow of “Nearshoring” Dawn, Reuters, 2023

Morgan Stanley, Mexico Is Poised To Ride the Nearshoring Wave, 2023

Rob Graver, Mexico Unseats China As Top Exporter To US, VOA News, 2024

Daniel Zaga, Alessandra Ortiz, Nearshoring In Mexico, Deloitte Insights, 2023

MND Staff, Foreign Direct Investment In Mexico’s Auto Industry Surges, Mexico News Daily, 2023

Data Mexico, United States, 2024

Ryan C. Berg & Henry Ziemer, Advancing U.S. Nearshoring Priorities In Central America with Special Economic Zones, Center for Strategic & International Studies, 2023 

U.S. Chamber of Commerce, Unlocking Latin America’s Nearshoring Potential: Breaking Down the Barriers, 2023

Joe Beckford, Renewable Energy and Nearshoring: the Caribbean’s Dual Investment Opportunities, 2023

Lorena Guarino, These Are the Sectors and Countries Leading Latin America’s Nearshoring Boom, Bloomberg Linea,2023

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