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Mexican manufacturing is putting places like China and Brazil in the shade. Exports and industrial data point to steady gains in competitiveness over the last decade. Mexico's wage costs are up only 20 per cent in dollar terms – a fraction of the increase in China and Brazil. With Europe mired in recession, global market share is up for grabs.

Offshore investors seem to see the opportunity. Foreign investment in Mexican stocks, bonds and the like doubled last year to $80-billion (U.S.), according to statistics released on Monday. On the other hand, foreign direct investment has stagnated, with a 35-per-cent drop in 2012, to $13-billion. Explanations for this vary and include a big swing caused by the flotation of the Mexican unit of Santander, the Spanish bank, but electoral uncertainty and a sometimes shaky security situation are surely also factors.

That hasn't stopped Mexico's domestic industries, however. Manufacturing exports last year were up 8.4 per cent and represented 80 per cent of all exports and 25 per cent of GDP. In spite of a continued decline in oil exports stemming largely from stifling government management of Pemex, the national oil company, Mexico in 2012 reported its first trade surplus in 15 years.

Behind these figures is a sharp improvement in Mexico's global competitive position. Productivity growth is far from stellar: it averaged 1 per cent annually between 1996 and 2010 before ticking up to more than 2 per cent in recent years, according to the Conference Board's Total Economy Database. But wages tell a different story.

Mexican hourly compensation increased only 20 per cent in dollar terms between 2001 and 2011 while Brazil's more than tripled, according to the U.S. Bureau of Labor Statistics. China's manufacturing wages almost quadrupled between 2000 and 2010, the Boston Consulting Group reckons. Investors may still be reluctant to inject money directly, but the portfolio investment flows in 2012 amounted to more than five times the cash that found its way to Brazilian assets.

With the reformist government of Enrique Pena Nieto relatively recently elected and costs still rising in other big emerging markets – not to mention the bureaucratic and other hurdles to doing business in, say, China – Mexico may be able to attract a new wave of direct investment from abroad. Even without that, domestic enterprises may finally be enjoying the payoff predicted when the North American free-trade agreement was signed 20 years ago.

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