The Kearney Confidence Index ranks the economies that most attract foreign capital. The entry of these Latin American countries is a reflection of the growing reshoring , nearshoring and friendshoring movement.
Mexico was ranked 21st in the Kearney Foreign Direct Investment Confidence Index worldwide, which ranks the economies that most attract foreign capital, and thus entered this classification that only includes the top 25 places and from which it was left out in the last five years.
The United States remained at the top of this classification, followed by Canada, China (including Hong Kong), the United Kingdom and Germany.
Brazil (19th place), Taiwan (22nd), Poland (23rd) and Argentina (24th) also entered that list.
Kearney said investors may have been excited by Brazil's Transportation Minister Renan Filho's September 2023 announcement that the market expects to attract $36.6 billion in private investment in new rail and highway projects over the next few years. the next three years.
"Mexico rejoins the main Index in 21st place after a five-year hiatus, perhaps due to the benefits it is obtaining from relocation," added the consulting firm.
The addition of Brazil, Mexico and Argentina this year is perhaps a reflection of the growing reshoring , nearshoring and friendshoring movement. The Kearney Reshoring Index highlights this nearshoring dynamic using Mexico as a key example. In fact, since the start of Covid-19, US imports of Mexican manufactured products have gone from US$320 billion to US$402 billion.
Kearney's 2023 Offshoring Index, for example, revealed that 96% of CEOs are considering offshoring their operations, have decided to do so, or have already done so.
The results show that tensions and the trade war between the United States and China are the second most cited nearshoring or friendshoring factor, behind supply chain disruptions, among investors who cite nearshoring or friendshoring as an influencing factor in their investment decisions.
Companies such as South Korea-based Samsung have already moved Chinese manufacturing to Vietnam, Apple has begun moving manufacturing from China to Vietnam, and Walmart is moving part of its business from China to Mexico, reflecting these changes in Supply Chain.
Finally, Argentina has not appeared in the top 25 since 2013. FDI inflows into Argentina increased to US$15.1 billion in 2022, up from US$6.8 billion in 2021. This nearly 125% increase reflects growing enthusiasm for market as an investment destination.
For the second time in the 26-year history of the FDI Confidence Index, a unique ranking of emerging markets was included to provide business leaders with insight into which emerging markets are most attractive to investors now and in the next three years. years.
China, the United Arab Emirates, Saudi Arabia, India, Brazil, Mexico, Poland and Argentina occupy the top eight positions, and are the only emerging markets included in the global ranking.
By region, America has the most markets on the list, with nine, followed by Asia-Pacific, with seven, the Middle East and Africa, with five, and Europe, with four. Southeast Asia continues to perform relatively well, with Thailand, Malaysia, Indonesia and the Philippines in the top 15. Vietnam, however, falls from 13th to 18th place, perhaps due to its decline in GDP growth to 4.6% in 2023, compared to 8.1% in 2022.
