Direct Foreign Investment Drops 25.7 percent in Mexico

The volume of direct foreign investment in Mexico fell 25.7 percent in 2003, from $14.4 billion in 2002 to $10.7 billion last year, the nation’s Department of Economy reported.

In a press release put out by that entity, foreign investment now ranks below money remittances ($13.3 billion last year) but above revenues raked in by the local travel industry ($9.5 billion).

A considerable chunk of that amount (35.4 percent) belongs to internal trading operations among companies, followed by new investments (24.7 percent), earning reimbursements (21.6 percent) and fixed capital imports by sweatshops (18.3 percent).

Nearly half the volume of direct foreign investment was funneled into the manufacturing industry (48.1 percent).

The also-rans on the list were financial services (19.4 percent), transportation and communications (16.2 percent), trade (8.6 percent) and other sectors (7.7 percent).

The same source indicates that 54.1 percent of investments came from the United States and 37.3 percent from the European Union.

Spain led the European pack with 14.6 percent of the total, with the United Kingdom trailing behind (9 percent), the Netherlands (5 percent), France (3.2 percent) and Germany (2.9 percent).

Canada, Switzerland and Japan combined for 8.6 percent of the remaining trade volume.

Direct foreign investment in Mexico will peak somewhere between $12 and $14 billion this year, 20 percent more than in 2003, the Department of Economy’s report concludes.