IMF Country Report No. 12/317: Mexico: Selected Issues http://www.imf.org/external/pubs/cat/longres.aspx?sk=40120.0 http://www.imf.org/external/pubs/ft/scr/2012/cr12317.pdf
p. 16: What explains Mexico's recovery of U.S. market share? Mexico's market share in the U.S. manufacturing market has staged a strong recovery since 2005. By mid-2012, Mexico's share of U.S. manufactured imports reached near 15 percent, surpassing its post-NAFTA peak. In contrast with earlier trends, Mexico's gains in the 2010-2012 period coincided with a fall of China's market share. Recent gains in market share may have been driven in part by improved relative unit labor costs in dollars. Other factors could include the reemergence of a location advantage due to higher oil prices and a change in inventory management among U.S. firms, and a reassessment of benefits of relocating to Mexico (including the protection of proprietary technologies). As a result, global manufacturers are increasingly relocating to Mexico (near-shoring of production), particularly in the automotive, aerospace and electronics and appliances sectors. [...] p. 21 Several factors could have contributed to explain Mexico's increased competitiveness: (i) Relative labor costs in dollar terms. Wages in the manufacturing sector in China have increased at an average annual rate of 14 percent in nominal yuan terms from 2003 to 2011, and close to 20 percent annually in dollar terms (Figure 6), given the appreciation of the yuan (Figure 7). In contrast, average wages in the Mexican manufacturing sector have remained fairly constant in dollar terms, underpinned by moderate wage growth and a depreciation of the peso (Figure 7). In 2003, average dollar wages in Mexico were six times higher than those in China, whereas in 2011 wages were only 40 percent higher. These developments have reduced the competitive advantage that China had as a low-cost supplier of manufacturing goods to the U.S. in the early part of 2000s. [...] _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
