Foreign direct investment in Mexico rises 40 percent year-over-year

tensions between the U.S and China have companies looking elsewhere for production facilities who's benefiting the most our SEMA mode is here at post tonight with a look at that morning SEMA good morning the ongoing issues in China really leading to this reshoring boom that we're seeing in Mexico and it's finally showing up in the data it's being led by the automotive industry Tesla setting up a 15 billion dollar gigafactory General Motors Ford building Vehicles there Cummins with heavy duty tru

cks more Capital flowing into Mexico is fueling cross-border shipments Freight transportation company rxos as volumes have grown about 30 percent year over year and one of the benefits of doing business there is lower costs manufacturing labor is cheaper than in China it's been that way for more than eight years according to strategis Mexico's government has also been pitching companies on a new Corridor that would rival the Panama Canal seen as one way to accelerate trade with the US and bring

more business to Southern States crime though specifically cargo theft remains a key risk for foreign companies experts also point to the countries political backdrop with a presidential election coming up next year so far that's not impacting Market sentiment the eye shares Mexico ETF outperforming other Emerging Markets up about 21 percent this year and the currency the peso has been strong as well since you've been you've been wondering about this theme and asking the analysts about whether t

he production shifts I mean it's just if you're gonna do it at home right it's gonna cost you but are you are you gonna pay up for what you're ostensibly getting in return right that is reliability American workers more control right and did the geographical proximity to the U.S cannot be overstated when it comes to a country like Mexico and and it's not just the automotive industry we've seen a number of Industrials including John Deere earlier this summer moving a specific plan from Iowa to Me

xico because of a tight U.S labor market we're watching this UAW strike we'll see if that uh how that plays into the reshoring efforts for that industry as well and by the way private equity and Venture Capital he's seen a surge in investment in Mexico this year as they try to play a bigger role in logistics and infrastructure boy it would be a political problem though if these strikes at like the union strikes lead to workers leaving the U.S three weeks ago is at risk on that note three weeks a

go the UAW president did say that stalantis is threatening to move production to Mexico so we'll see how the story plays out