The Manufacturing industry is one of the major industries of the economy of Mexico. Manufacturing costs are cheaper in Mexico than China. In addition, Mexico offers many advantages over China with respect to manufacture of goods.

The following are few of the key cost differences between Mexico and China in manufacturing according to research by IVEMSA:

Labor – Wages in Mexico are 30% lower than wages in China.

Energy – Electricity costs are 4% lower in Mexico than China; Natural gas prices for commercial use are 60% lower in Mexico.

Transportation – Obviously transportation costs are very cheaper from Mexico to the US relative to shipping from China. The cost to move a 40ft container from China to the US in 2021 was about $10,000 and it took many times to arrive in the US. On the other hand, it costs about $240 to move a 53ft trailer from Mexico to the US. Moreover the truck would cross the border the same day.

Industrial Lease Space – The cost to lease an industrial building is 50% lower in Mexico than China.

Source: Mexico’s Manufacturing Costs, IVEMSA