Mexico

Posted on 23 October 2012 by Douglas Chadwick

In amongst the overall gloom that seems to surround most of the financial markets today, it must still be worth looking for those markets which can most benefit from the turn up when it eventually arrives. I believe that Mexico is one of the countries that could fall into this category.
 
It now has labour costs that almost match those in China - so it can manufacture cheap goods on a competitive basis. Its labour rates have remained fairly level in the last few years, whilst those in China have soared.
 
It sits on the door step of North America, the largest consumer market in the world. Its delivery costs do not include a sea freight element, like the goods manufactured in China - yet another advantage both in time and price.
 
Many of the manufacturing companies are part owned by American businesses, so they have an incentive to place orders in the 'home' factories.
 
Mexico has a young workforce that is becoming more and more skilled. Mexicans that have been working in California are starting to return home to work.
 
Now all it requires for the Mexican economy to start to fly, is for the American economy to take off. However there are a few stumbling blocks to be overcome for that to happen. Presidential elections, January`s fiscal cliff, improving employment numbers, and more dollar security would all help. However all of these events must eventually come to pass and become part of history. Then just watch the Mexican economy and find that ETF that tracks the Mexican stock market. Could be happy days.