Mexico, without a doubt, took a very hard hit in 2009. Virtually everyone north of the border wrote off Mexico in 2009 and pretty much for the next couple of years. Brazil and most of the rest of Latin America were supposedly already recuperating from the crisis and growing again in the black, even in the last quarter of 2009. Therefore, both Latin America and the BRIC markets (Brazil, Russia, India, and China) were supposed to greatly out pace Mexico in trade during the next few years, and therefore they were supposed be better markets for US products and services.
During the last few weeks, 2009 US export figures were released. If export figures are an indication of economic dynamic in an economy, the reports of Mexico´s fall was not only exaggerated but perhaps all wrong. In 2009, US exports to Mexico did drop, but by a very reasonable 14.5%. Even with that decrease, US exports to Mexico increased from 11.75% of total exports in 2008 to 12.2% in 2009. During that same time, exports to every one of the top 12 US export destinations dropped by more than the Mexico drop, with the exception of China that experienced small, single digit negative growth nonetheless. Also, the 14.7% US export decrease for Mexico was below the 16.4% average decrease for the next top 10 Latin America export destinations.
A lot of corporations judge growth potential against the export volumes and growth figures for the BRIC countries: Brazil, Russia, India, and China. During 2009, total US exports to all of the BRIC countries totaled $117.7 billion while total US exports to Mexico were over $10 Billion more at $129 Billion. Exports to Mexico represented 12.2% of total US exports while exports to BRIC countries represented only 11.2%. Likewise, while Mexican export growth fell by close to 15%, the average export growth of the BRIC countries was over 17%.
In the State of Wisconsin, which LGA Consulting represents in Mexico, the numbers are even more pronounced in favor of the Mexican market in 2009. Wisconsin exports to Mexico did drop like US exports to Mexico, but by single digit figures. Also, even with this decrease, like total US export figures, Wisconsin exports to Mexico increased from 7.9% in 2007 to 8.6% in 2009 to 9.5% in 2009, and more than 1/3 of exports to Canada, the top export destination, for the first time. In 2009, Wisconsin export growth to China (-10.8%) was actually hurt more by the economic crisis than Wisconsin exports to Mexico (-9.8%). Also, the Wisconsin export decrease to Mexico was below the (-12.8%) average decrease of the next top 10 Latin America export destinations. It is also important to note that while Wisconsin exports to the four BRIC countries (10.5% of total exports) were somewhat more significant than Wisconsin exports to Mexico (9.5% of total exports), export growth to Mexico (-9.80%) was actually slightly more vibrant than export growth in the supposedly growth-orientated BRIC countries (-9.83%).
Mexico has always been a good market for almost all US goods, and even during severe economic down turns, it is evident that Mexico is a market for US exports that should not be overlooked nor underestimated. So, for those companies that decided to look elsewhere in 2009, LGA Consulting would like to suggest that they reconsider Mexico in 2010, still the US´s #2 export destination and one that is more than keeping pace with the rest of the world markets, including the still vibrant Chinese market.
