Mexico’s nearshoring momentum remains intact, even as the pace of new investment announcements has slowed. Recent data shows that while the value of announced foreign direct investment (FDI) linked to nearshoring dropped in 2025, the actual execution of projects and reinvestment of profits by foreign firms reached record levels, suggesting a recalibration rather than a retreat.
FDI hit an all-time high of USD 40.9 billion in the third quarter of 2025, with 67.8% stemming from reinvested earnings. This composition reflects a shift in investor behavior: rather than committing fresh capital amid heightened uncertainty, many foreign firms are doubling down on existing operations. Only 16% of total FDI came from new investments, with the remainder attributed to intercompany accounts. The predominance of reinvested profits suggests that companies already established in Mexico continue to see value in local operations, even as external and domestic headwinds complicate expansion plans.
Between 2023 and 2025, Mexico registered 466 nearshoring-related investment announcements worth USD 114.7 billion, tied to an expected 235,000 skilled jobs. Yet the trendline is downward: announced investment value in 2025 was 23% lower than in 2024 and nearly half that of 2023, the peak year. Despite this decline, the number and value of project inaugurations reached new highs, with USD 8.3 billion worth of projects completed in 2025 alone—more than in any prior year within the same period.
Reinvested earnings outpacing new capital suggests firms are consolidating rather than withdrawing from Mexico’s nearshoring landscape.
This divergence between announcements and completions underscores a nuanced dynamic. While investor appetite for new ventures may be cooling due to macroeconomic and policy risks, firms are proceeding with implementation of previously announced plans. Manufacturing hubs appear to be the primary beneficiaries, reflecting Mexico’s continued appeal as a production base close to U.S. markets.
The federal government’s long-term industrial strategy, known as ‘Plan México,’ aims to capitalize on this trend by promoting regional development and import substitution through fiscal incentives and targeted infrastructure. A decree issued in 2025 provided tax benefits within designated economic development zones—an effort to align public policy with private-sector interest in relocation. However, limited fiscal space and sluggish economic growth have constrained the scope of government support.
External challenges have also weighed on investor sentiment. The reimposition of U.S. tariffs under the Trump administration, though selectively applied, has heightened trade uncertainty. Moreover, the looming 2026 review of the USMCA adds another layer of unpredictability for firms weighing long-term commitments. Domestically, reforms to the judiciary and regulatory changes across sectors such as energy, customs, railways, and telecommunications have introduced institutional volatility, prompting some companies to delay or scale back investment plans.
Still, the resilience of project completions and reinvested earnings suggests that Mexico’s nearshoring story is far from over. Rather than signaling a reversal, the current slowdown may reflect a consolidation phase. As firms adapt to evolving trade dynamics and regulatory frameworks, the foundations laid by earlier announcements continue to materialize on the ground.
