North American manufacturing is on the rise, driven by the need for resilient supply chains and the strategic advantages of nearshoring. Recent data shows substantial growth in sectors like automotive, electronics, and consumer goods production across the U.S., Canada, and Mexico.
According to industry studies, North American manufacturing output has steadily increased, supported by high productivity rates and a skilled workforce. These trends align with the broader nearshoring movement, as companies look to relocate production closer to key markets to reduce lead times, improve quality control, and increase flexibility.
The United States, Canada and Mexico share a population of 500 million people, a GDP of nearly $30 trillion dollars, and each alone are important global economies.
In face, 1 of every 17 U.S. jobs is supported by trade with Canada and Mexico. These jobs are commonly associated with manufacturing, but in reality the vast majority are in the service sectors, including everything from finance to healthcare and retail. When competitively priced goods are brought into the marketplace, the buying power for local consumers increases.
Recent manufacturing investments across Canada, Mexico, and the United States highlight the region's dynamic industrial growth.
Volkswagen aims to establish a North American battery production facility to support its electric vehicle (EV) expansion, leveraging Canada's resources and skilled workforce.
Nutrien's Fertilizer Expansion
The motive of Nutrien's expansion is to increase potash production capacity in response to global demand for fertilizers, enhancing food security in the face of uncertain supply in Eastern Europe.Stellantis and LG Energy Solution's Battery Plant
To establish Canada's first large-scale EV battery manufacturing facility, supporting Stellantis's North American EV strategy and aligning with Canada's focus on clean energy and sustainability.
Intel’s Semiconductor Manufacturing Plant
To boost domestic semiconductor manufacturing, reduce reliance on overseas chip production, and meet the growing demand for advanced computing technologies. This investment aligns with the CHIPS Act, designed to strengthen U.S. semiconductor supply chains.
Nestlé Purina PetCare Expansion
Nestlé Purina's investment in a new manufacturing facility reflects the growing demand for premium pet food products in the U.S. market. This expansion aims to meet increasing consumer needs while leveraging the region's skilled workforce and strategic logistics infrastructure.
Hyundai Motor Group's EV and Battery Manufacturing Plant
To expand Hyundai's EV production capabilities and support its commitment to sustainability and electrification goals. This investment will establish a state-of-the-art facility to produce EVs and batteries for the North American market.Volvo's motive is to expand production capacity for Volvo and Mack Trucks in North America, capitalizing on Monterrey's logistical advantages.
Taiwanese Electronics Manufacturer Inventec's Facility Expansion
To expand production capacity for laptops, servers, and other electronic components, capitalizing on nearshoring opportunities and Mexico's proximity to the U.S. market. This investment is motivated by the growing demand for electronics in North America and the shift away from reliance on Asian supply chains due to trade and logistical challenges.
To produce the new generation of the Tacoma pickup, including hybrid models, and create 1,600 new jobs.
One of the key reasons manufacturers are choosing to expand within North America is the proximity to major markets, particularly the U.S. By producing goods closer to their end markets, companies can reduce lead times and lower logistics costs. This proximity not only speeds up delivery but also enables manufacturers to respond quickly to changing demand, a critical advantage in today’s fast-paced economy.
In particular, Mexico’s location provides an ideal base for nearshoring, allowing companies to take advantage of its shared border with the United States. Goods manufactured in Mexico can reach the U.S. in hours rather than weeks, making it possible to optimize inventory management and avoid costly delays.
North America is home to a highly skilled and adaptable workforce. In Mexico, the labor market has evolved to meet the demands of industries such as automotive, electronics, and aerospace, which increasingly require expertise in advanced manufacturing techniques. As the electric vehicle (EV) sector grows, for instance, Mexico’s workforce is rapidly adapting to new technologies and production processes in electromobility.
This established talent pool allows manufacturers to ramp up production without the extensive training and onboarding periods often required in other regions. Mexico’s technical universities and vocational training programs also provide a steady pipeline of qualified workers, reducing recruitment challenges and supporting companies’ long-term growth.
The United States-Mexico-Canada Agreement (USMCA) has further boosted North America’s attractiveness for manufacturers by reducing trade barriers and fostering regulatory alignment across the three countries. This agreement provides tariff benefits and streamlines cross-border commerce, making it easier for companies to operate across the region.
Additionally, various states in Mexico offer economic incentives to attract foreign investment, including tax breaks, simplified permitting processes, and free trade zones. These incentives, combined with Mexico’s competitive labor costs, create an advantageous environment for manufacturers looking to expand their operations affordably and efficiently.
In the context of expansion, manufacturers may consider outsourcing their production to a contract manufacturer or shelter service provider. From cost or risk reduction to regulatory or market compliance in a new market, there are many reasons why manufacturers seek a partner.
For manufacturers unfamiliar with the regulatory and operational landscape in North America, manufacturing outsourcing and shelter services offer a practical solution. These services, particularly shelter providers in Mexico, allow companies to focus on production while the shelter provider manages administrative tasks, regulatory compliance, and other essential functions.
Shelter services in Mexico are designed to simplify market entry, providing a fully supported operational framework that allows manufacturers to sidestep the complexities of establishing a standalone entity. By handling HR, legal compliance, payroll, and other non-core functions, shelter providers offer a streamlined approach that reduces risk and accelerates time to market.
In the new era of trade fueled by nearshoring, advanced technologies, and shifting geopolitical dynamics, manufacturers are rethinking their strategies to capitalize on regional strengths and sustainability.
In today’s unpredictable market, agility is key. Manufacturers must be able to respond swiftly to changes in demand, supply chain disruptions, and evolving customer preferences. Shelter and outsourcing services may provide the flexibility to scale operations as needed, as well as provide integral support to key suppliers with small-scale operations.
One of the main advantages of shelter services is the ability to enter the market quickly. Setting up a standalone entity in a new country can take months, if not years, due to regulatory requirements and setup costs. Shelter providers, however, offer turnkey solutions with ready-to-operate facilities, trained personnel, and established local networks, enabling manufacturers to start production in weeks.
By outsourcing administrative and compliance functions to a shelter provider, manufacturers can reduce financial risks and control costs. Shelter services offer predictable cost structures, which can be advantageous for budgeting and financial planning. This setup allows companies to allocate resources more effectively, focusing on production and growth rather than administrative overhead.
As a company offering shelter services in Mexico for nearly 40 years, Prodensa has adapted the turnkey operating models that provide value for foreign manufacturers seeking to expand in Mexico.
Selecting the right location for expansion is critical. Factors like proximity to customers, availability of skilled labor, and local incentives can significantly impact operational efficiency and cost-effectiveness. Manufacturers should consider regional benefits within North America, particularly in Mexico, where specific states offer unique advantages for various industries.
Read how one company compared site options in Mexico and the United States for their planned expansion.
While shelter services offer immediate support for market entry, long-term planning is essential for sustainable growth. Manufacturers should approach nearshoring with a strategic vision, focusing on building resilient supply chains and investing in workforce development.
Shelter providers can support this long-term approach by offering scalable solutions and assisting with eventual transitions to standalone operations if desired. This continuity allows manufacturers to develop a strong presence in North America, positioning them for continued success as market dynamics evolve.
For manufacturers aiming to strengthen their position in the North American market, nearshoring and shelter services present compelling advantages. By leveraging these strategies, companies can achieve agility, cost-effectiveness, and risk mitigation, while tapping into the benefits of the USMCA and a skilled regional workforce.
The demand for resilient and responsive supply chains has never been greater, and North America is emerging as a prime location for manufacturing expansion. With the support of shelter service providers, manufacturers can navigate the complexities of entering new markets, maintain operational flexibility, and set the stage for sustainable growth.
Now is the time for manufacturers to embrace the opportunities presented by nearshoring. By partnering with a trusted shelter service provider, companies can unlock the full potential of the North American market, ensuring they remain competitive, adaptable, and positioned for long-term success.