Mexico’s economy can be characterised by the high degree of contrast that exists between its industries. On the one hand, Mexico has a wealth of modern and highly advanced industries that contributes a significant portion to its GDP; yet at the same time, a number of industries in Mexico are fairly outdated and labour intensive.
A vast number of Mexican industries are catered towards serving the US market. Since the advent of NAFTA, trade between Mexico and the US have more than tripled. Starting in the late-1980s-early 1990s, Mexican industries have been increasingly heading towards privatisation with the banking and telecommunications industries among the early pioneers. Mexico’s oil production though still remains in the hands of the state-owned Pemex.
At present, the Mexican government is focused on improving the social and economic infrastructure in the country so as to facilitate industrial growth. Development has been expanded to include Mexico’s seaports, railroads, telecommunications, electricity generation and natural gas distribution and airports.
In 2010, Mexico’s industrial production growth rate was the 58th highest in the world at 6 percent. Although industrial production in Mexico is beginning to show signs of slowing down, Mexico’s Economy Minister Bruno Ferrari is relatively unconcerned; citing previous double-digit growth in the country and the market adjusting to those levels as the primary reasons behind a lower industrial production growth rate. So what you are seeing is a normal thing" he said. "I expect (industrial production) to continue growing."
Major Mexican industries include food and beverages, tobacco, chemicals, iron and steel, petroleum, mining, textiles, clothing, motor vehicles, consumer durables, tourism.
Agriculture was responsible for 4.2 percent of Mexico’s GDP in 2010. The role of agriculture in Mexico’s economy has been gradually diminishing as the nation slowly transitions to a higher level of development. Over the last 40 years, Agriculture’s contribution to Mexico’s GDP has fallen by more than 20 percentage points.
Despite this, Agriculture continues to retain some level of historical and cultural significance in the country. After the Mexican Revolution from 1910-1911, the Mexican government implemented the ejido system into the constitution, which provided free communal land to be used by the Mexican people. Although ejidos was removed from the constitution by then-President Carlos Salinas de Gortari in 1991 – citing low productivity – most of the ejido land still remains in the hands of farmers. As such, despite contributing to a very small percentage of the economy, Agriculture still accounts for 13.7 percent of Mexico's labour force.
Industry contributed to 33.3 percent of Mexico’s GDP in 2010. One of the most important industries in Mexico is the automotive industry. Many major car manufacturers have set up their operations in Mexico, including General Motors, Ford, Chrysler, BMW, Toyota, Honda, Volkswagen and Mercedes Benz. The Mexican automotive industry has also gradually become more advanced – from purely functioning as an assembly manufacturer to becoming a centre for research and development.
The electronics industry has also seen rapid expansion in Mexico in the last decade. Mexico is currently the 2nd largest supplier of electronics to the US – after China. In 2007, Mexico also became the world’s largest producers of televisions and smart phones. Mexico’s Program for the Electronics and High Technology Industry Competitiveness (PCIEAT) has targeted the country to become one of the top five global exporters of electronic goods.
The oil industry though, still remains as the largest industry in Mexico. In 2010, Mexico was the 7th largest producer of oil in the world – producing 3.001 million barrels a day – as well as being the 2nd largest exporter of oil to U.S. Mexico also produces 60.35 billion cubic metres of natural gas every year, making it the 12th largest producer in the world. As written into the constitution, mineral resources are the “nation’s property” and as such the all energy supplies are controlled by the state. In 2010, Services contributed to 62.5 percent of Mexico’s GDP, with the two most important services being tourism as well as finance and banking.
