Nuevo Leon: Registered a sustained growth in 2018

 

During the first six months, Nuevo Leon was the State that incorporated the highest number of new companies before the National Registry of Foreign Investments, reaching the amount of 26 companies.

 

The Ministry of Economy and Labor in Nuevo Leon (SEDET, by its Spanish initials) said that during the first semester of 2018 the Foreign Direct Investment grew about 89 % in the State.


During the first six months of the year, FDI in Nuevo Leon amounted to 1,724.1 million dollars, an increase reflected in the aforementioned percentage in relation to the same period of 2017, according to a report from the Federal Ministry of Economy.


The State Ministry of Economy and Labor announced that after the first part of the year Nuevo Leon continues in first position in Foreign Direct Investment attraction in Mexico, surpassing states such as Coahuila and Guanajuato.


The FDI captured by Nuevo Leon during the first semester of 2018 comes mainly from the United States, with a 50 % participation; Argentina with 19 %; Spain with 12 %; and the Netherlands with 9 percent.


The sectors that stood out with greater participation in the FDI received by Nuevo Leon during the first semester were: manufacturing with 958.7 million dollars and represents 56 % of what was captured in the first part of the year; financial services with 283.6 million dollars, which represented 16 % total; and commerce and services, which attracted 139.4 million, with 8 percent.


During the first six months, Nuevo Leon was the State that incorporated the largest number of new companies before the National Registry of Foreign Investments.


The total number of new firms with foreign investment in their registered capitals in Nuevo Leon reached 26, followed by Quintana Roo with 13 and Jalisco with 12 new companies.


It should be noted that the increase in the flow of foreign investment to Nuevo Leon is partly due to the fact that the socio-political and international economic scenario has begun to clarified, and the projects that had been paused during the year 2017 due to the position of the new Government of the United States has been reactivated and in many cases confirmed.


The foreign injection from the US was 863 million dollars in the first half of this year, 70 % higher than in the same period of the year before, when it was of 507.2 million dollars.


It is expected that the flow of productive foreign capital to the entity continues increasing in the upcoming months and the region continues to be a leader in attracting foreign direct investment in Mexico.

 

POTENTIAL SCENARIO FOR NAFTA NEGOTIATIONS

 

One of greater uncertainty generators regarding manufacturing has been the NAFTA renegotiation.  The Bank of Mexico considers that the normalization of interest rates in the United States and the process of political transition in the country will affect the growth of the main macroeconomic indicators.


The institution calculates economic growth in Mexico between 2 % and 2.6 %. Therefore, CAINTRA considers attenuation in the dynamics of national hiring and forecasts the generation of 785 thousand jobs in Mexico by the end of 2018.


The Chamber keeps its estimate of GDP growth at 2.19 % by 2018, given the dynamics of other indicators that keep production growing.


General and manufacturing exports continue to exceed what was achieved a year ago and accumulate growth of 10.8 and 8.9 % respectively until July.  In addition, the consumer confidence indicator showed the highest rebound recorded from one month to the next since it began to be measured.  During July, the index consumer went from 89.8 to 105 points.  If this confidence is maintained, the income from trade in Mexico could increase and impact the aggregate.


Considering the effects mentioned on the sector, CAINTRA anticipates that the manufacturing sector will be able to close with a growth of 2.4 % for the country and 2.0 % for the State; In addition to that, 170 thousand manufacturing jobs have been generated nationally and 25 thousand in Nuevo Leon.


On the other hand, Guillermo Dillon Montana, General Director of CAINTRA, said that the Chamber will continue to monitor State SMEs, providing orientation programs that can even be reproduced in other parts of the country to potentiate them.


“As of December 1st, we would like to have direct communication with the Mexican Model of Dual Formation and with the CAINTRA Philanthropic Fund.  The intention is to continue working with the new administration to take the programs to other levels where there are more beneficiaries throughout the country,” he said.

 

INEGI REPORTS GROWTH

 

The Quarterly Indicator of the State Economic Activity (ITAEE, by its Spanish initials) from the INEGI provides short-term information that allows having a scenario of the economic evolution in each one of the country’s federative entities.


The ITAEE reported during the first two quarters of 2018 an economic growth of 1 % in Nuevo Leon compared to the same period of the previous year.


Compared to the other States of the Country, Nuevo Leon is located in the fifteenth position in registered growth, but as for the entities that reported the highest growth to the national economy it had the fifth position, only surpassed by San Luis Potosi, Jalisco, Baja California Sur and the Estado de Mexico.


The growth showed during the first part of the year is due to the increase in the activities of agricultural and livestock industries, as well as to the maquila sector, of mining and construction.


SHORT TERM FUTURE


For 2019 outcomes are still reserved, as there is the expectation about the resolution of the new NAFTA, although in Nuevo Leon case it is expected some investments will be concreted which come from Asian countries such as China and Korea.