Despite common misconceptions, Mexico’s economy is heavily reliant on trade, pushing companies to develop complex supply chains and constant import cycles. In 2023 alone, it is estimated that the country imported over $598 bn worth of goods and exported an additional $593 bn, for a total trade value of $1.19T. As a reference point, the entire country’s GDP is roughly equal to $1.79T, meaning that Mexico’s overall trade is worth about 66.5% of GDP. Not to mention that, in recent months, the country has surpassed China as the largest trade partner to the US, making it a heavy weight in global commerce. So, it is no understatement to say that trade is the backbone to Mexico’s economy and sets the pace for Mexican companies to follow.

Thus, given how prominent commerce is to Mexico, we wanted to look more closely at the country’s overall trade patterns. In particular, we wanted to see if there were any trends in the flow of goods that differ from established global patterns that often dictate imports increase towards the latter half of the year in preparation for holiday season. More so at a company level, understanding how large commerce players shape Mexico’s overall behavior when it comes to trade. 

We focused our analysis on one key metric: imports. This is because, in doing so, we might get a better idea of both trends in consumption of foreign goods, but also on the seasonality of raw materials imported for production. Since Mexico is an industrial economy with 20% of GDP coming from manufacturing, we expect a prominent share of imports to be related to industry on top of overall consumption. So, by focusing on imports, we might gain a more holistic picture of Mexico’s economy and the patterns of Mexican companies.

An initial route to understanding Mexican trade would be to look at broad data for imports as that provided by Mexico’s government. However, such data shows little trends as experienced by Mexican companies. In fact, for 2023, there is little variance between imports in January and December, with only mild bumps in March, May, and August.

Mexican Monthly Imports (2023)

(Data from INEGI)

To better understand how companies influence trade in Mexico, we compiled a comprehensive dataset on the value of imports for 51 of the nation's largest enterprises by yearly income—considering Mexican companies or companies with an existing public entity registered under Mexican law. The dataset was put together using Pentatransaction, an online tool to track import and export data from various countries around the world. In total, we found data for 51 of the nation’s largest importers, accounting for roughly 45.6% of all income amongst the top 500 companies in the country (excluding government-owned projects). While these, together, account for just2.6% of Mexico’s total imports, they are by far the heaviest players in the realm of commerce, likely dictating the broad patterns followed across the private sector.

Share of Income from Top 500 Companies Represented in Sample

(Data from Pentatransaction and Expansion)

As a first result, we found that the bulk of imports in our data set came from heavily industrial companies, importing raw materials or manufacturing tools. These included three of the largest airplane manufacturers in the country (Volaris, Viva Aerobus, and AeroMexico), all of which imported over $1.5 bn worth of goods in 2023—likely a result of the high cost of airplane parts. They were followed by three industrial companies (Alpek, DeAcero, and Orbia), importing over half a billion USD worth of goods. This, of course, was to be expected given Mexico’s industrial nature—many of the country’s top importers are bringing in raw materials to later create complex products.

Mexico’s Largest Importers (2023)

(Data from Pentatransaction)

Seeking a better understanding of broad cycles in the economy, we extracted the total monetary value in USD for each import performed in 2023 and aggregated that data on a monthly level. This allowed us to understand the broad share of imports that entered the country every month in the previous year. 

Our first results were surprising in and of themselves. When plotting the share of imports each month amongst top companies in our sample, we found a pattern that differed from global trends. We do see a mild increase in the share of imports in August, likely in preparation for the holiday season and Mexico’s Equivalent to Black Friday (“El Buen Fin”). However, the largest increases to trade happened in the first half of the year and not the second, as global trends would suggest. In fact, the most meaningful bump occurred in March, when 11.17% of all trade was imported to the country, followed later by May with 8.7% of total imports. So Mexico is not a picture perfect copy of international norms.

Import Business Cycles in Mexico (2023)

(Data from Pentatransaction)

Since, as we saw earlier, the airplane industry accounts for a meaningful share of our sample, one might wonder if these companies are leading this odd pattern. And, to some degree, that much is true. If we plot the airplane industry on its own, we notice that it has a large increase in imports in the month of march. However, if we were to remove the three largest airline companies from our sample, we would notice the exact same pattern—in fact, march imports as a share of the total would grow from 11.17% to 11.46%. It is actually the case that most of this ealy bump comes from Mexico’s industrial companies which are importing large amounts of raw materials early in the year planning ahead for manufacture. Low effort goods and raw material companies exhibit an import cycle more heavily bent towards the end of the year, but their overall import value does little to change national trends.

Import Cycle for Mexican Industrial Companies, Airplane Manufacturers, and Low Effort Goods (2023)

(Data from Pentatransaction)

If we look more closely at CPG and Retail sectors, we will notice that these do follow more broadly expected trends. As it stents, they seem to be almost inverted. CPGs import larger quantities of goods earlier in the year to plan for future months of manufacturing. Retail, for its own part, only starts boosting its imports towards the later half of the year, in preparation for the holiday season and more broadly in line with global trends.

Import Cycle for Mexican Retail and CPG (2023)

(Data from Pentatransaction)

The above analysis helps us understand how Mexico fits into global logistics and might serve as a semblance of hope for the country. Around the world, supply chains are currently at a brink, with container spot rates rising dramatically due to a number of trade disruptions (from Houthi rebels attacking vessels in the Red Sea, to historic droughts in the Panama Canal). Since many of these disruptions are unlikely to change in the near future, companies around the world are preparing for the grim reality that might result from increased trade during the holiday season but limited capacity.

Mexico, however, has a different structure to most countries. By virtue of its manufacturing nature, Mexico’s import cycles are different to those of the rest of the world, concentrating on the first half of the year rather than the latter. As a result, the bulk of imports to the country already happened. Only retail and low effort goods are likely to experience roadblocks in expediting imports in the latter half of the year. But even then, their imports would not cause delays in Mexican ports or border crossings accustomed to even higher upticks in trade.

In summary, Mexico is reliant on trade but fails to follow broadly held beliefs about global commerce. While most countries see upticks in imports towards the latter half of the year, Mexico’s economy is more heavily reliant on earlier months. All this to say, that Mexico’s import cycles are worthy of consideration and further analysis.