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Chapter | San Luis Potosí from The Report: Mexico 2019

In 2018 San Luis Potosí was the eighth-fastest growing state in the country. Key growth drivers for the state economy include the automotive, manufacturing, agriculture and tourism sectors. Traditional industries have continued their strong performance into 2019, while new sectors are emerging that are aimed at diversifying the state’s economic offer. Collaboration with other states, coupled with predictions for another strong year, means San Luis Potosí will likely continue to consolidate its position as one of Mexico’s most attractive and reliable states for investment. This chapter contains interviews with Juan Manuel Carreras López, Governor of San Luis Potosí; Gustavo Puente Orozco, Secretary of Economic Development, State of San Luis Potosí, Jaime Chalita Zarur, President for San Luis Potosí, Employers Union of the Mexican Republic; and Hermann Bohrer, President and CEO, BMW Group Plant San Luis Potosí.

Chapter | Economy from The Report: Mexico 2019

Analysts are expecting 2019 to be the fourth successive year of economic deceleration, with the IMF forecasting growth will fall to 1.6% in 2019 before accelerating modestly to 2-3% over the medium term. Some risks to growth include the continued slowdown of the US economy, to which Mexico’s fortunes are closely tied, and the rising uncertainty generated by global trade tensions. However, given the government’s commitment to maintain a conservative fiscal and monetary policy, and to keep private sector debt levels low, in addition to the substantial financial support provided by the IMF and central bank reserves, a full-blown financial or economic crisis is unlikely. This chapter contains interviews with Graciela Márquez Colín, Minister of Economy; and Eduardo Sojo Garza-Aldape, Director-General, National Laboratory of Public Policy at the Centre for Research and Teaching in Economics.

Chapter | Entrepreneurship + R&D from The Report: Mexico 2019

Mexico is considered to be at the leading edge of Latin America in terms of innovation in business modelling, with a mature tech sector installed in clusters across Mexico City, Monterrey and Guadalajara. Furthermore, it has a second tier of smaller cities housing start-ups that apply technology to a number of sectors, from automotive, aviation and banking, to renewable energy and urban mobility. However, the country’s investment in research and development (R&D) is below the global average. The private sector looks set to take the lead in R&D investment, with the current government announcing a 13.6% cut to the 2019 budget for science and technology. Moreover, a legislative proposal for a new federal science and technology law is being studied. It is hoped that the reform will change the way policies are designed and implemented. It is also intended to spur investment and secure investor confidence.

Chapter | Construction & Real Estate from The Report: Mexico 2019

The country’s potential in this area is highlighted by its rank of 49 out of 140 countries in terms of infrastructure in the “Global Competitiveness Report 2018” published by the World Economic Forum. Despite this, between 2017 and early 2019 the sector faltered due to a slowdown in civil engineering projects and uncertainty about Mexico’s trade relationship with the US. Although uncertainty clouds the outlook for the national economy, opportunities exist at the local level. State and local governments have helped boost infrastructure investment and industrial development, and the dynamism of these industrial hubs is likely to continue to spur demand. According to industry insiders, after 20 years of significant economic growth and major investments in new infrastructure and multi-use developments, Mexico’s real estate sector is resilient enough to weather short-term concerns and uncertainties. This chapter contains an interview with Fernando Romero, CEO, FR-EE.

Chapter | Hidalgo from The Report: Mexico 2019

With an economy traditionally based on mining, Hidalgo had lagged behind some of Mexico’s more prosperous and dynamic regions. However, the new administration has actively sought to foster growth in new sectors including renewable energy, sustainable transport, agro-industry, pharmaceuticals and chemicals; develop infrastructure; and create a more business-friendly regulatory framework. As a result of these efforts, it has recently recorded growth and foreign direct investment figures that exceed the national average. Hidalgo also has several advantages including close proximity to Mexico City and major road networks, a range of both new and well-established industries operating in the area, and a young and educated workforce. This chapter contains interviews with Omar Fayad Meneses, Governor of Hidalgo; José Luis Romo Cruz, Executive Secretary of Public Policy; Sergio Vargas Téllez, Secretary of Economic Development, State of Hidalgo; Camilo Serrano, General Manager for Mexico, Atlas Renewable Energy; and Cassiano De Stefano, CEO, Grupo Modelo.

Chapter | Industry & Mining from The Report: Mexico 2019

A number of factors bode well for Mexico’s industrial sector. Cheap labour costs, proximity to the US market and improving human resources have attracted global firms. The sector in Mexico is making gains in some strategically important areas, and strong performance in the mining, electronics and agri-business segments is driving overall growth. Even as protectionist measures and bilateral trade tensions dominate the headlines, Mexico is strategically positioned to support Chinese manufacturers looking to bypass US tariffs. A number of risks and uncertainties remain for several industrial segments, however. The shortage of oil and natural gas supply, the absence of a government-led policy and criminal activity along supply routes are causes for concern. Still, investors will likely see ample opportunities in Mexico’s strong ties to the global economy, especially the US and China. This chapter contains an interview with Francisco Cervantes, President, National Confederation of Industry Chambers.