Unlocking the advantages of manufacturing in Mexico starts with a strategic location decision. Executives must weigh how each potential site will shape long-term operations, from labor stability to logistics scalability. After all, Mexico’s industrialized area is huge, spanning large and small urban regions, and any selection will demand some give and take.
Before investing in a factory in Mexico, manufacturers should make sure that all of the boxes on their site selection checklist are checked. Below, we offer 11 questions to ask as you move through your site selection process.
1. Are local demographics in my favor?
The biggest factor driving companies to manufacture in Mexico is the search for labor stability. Yet it’s essential to recognize that the workforce pipeline varies across the country. Before making a decision, manufacturers should dig into local demographics. Do you know if the local population is growing or shrinking? Will your company have the stability of hiring from a young population? What are turnover rates among local employers?
2. Are wages competitive?
Launching a factory is an expensive undertaking. Manufacturers must evaluate both upfront and long-term costs, and labor is one of the biggest variables.
Mexico offers a labor cost advantage compared to many other countries, driven in part by a lower cost of living. However, wages can vary significantly by region. Established industrial hubs typically command higher wages, while emerging markets may offer greater cost efficiencies.
The table below shows fully fringed wages for unskilled labor in five major industrial regions:
| City | Wage (USD/hour) | Savings vs. Tijuana |
|---|---|---|
| Tijuana | $7.59 | — |
| Monterrey | $6.63 | 12.6% |
| Saltillo | $6.22 | 18.1% |
| Hermosillo | $5.27 | 30.6% |
| Mazatlán | $4.84 | 36.2% |
3. Are there existing options to support workforce training?
Assuming the region of interest has labor available, it’s also important to ensure operations will have access to the right blend of skill sets. After all, it’s the shortage of skilled labor that is keeping manufacturing plants in the U.S. from producing at their full capacity, as Supply Chain Management Review reports.
Most factories will require a blend of unskilled, semi-skilled, and skilled workers. While direct labor roles can be taught in the factory, companies may also need machinists and CNC operators, as well as CNC programmers and production managers. Therefore, manufacturers should evaluate whether the locations they are evaluating in Mexico are home to technical institutes interested in partnering on training or Manufacturing Communities with space for training.
4. Is there readily available real estate?
To accommodate the growing interest in manufacturing in Mexico, the industrial real estate industry has seen a significant uptick in recent years. Constrained markets have added square footage to meet demand. It remains important for manufacturers to visit potential factory sites to ensure they have come online with the expected access to utilities and offer room for future growth. Manufacturing Communities may offer additional advantages over typical industrial parks in Mexico, such as integrated security features, amenities designed to attract employees, and onsite services.
5. Are real estate costs competitive?
Labor isn’t the only operating cost manufacturers should evaluate. Industrial real estate rental rates, especially for Class A space, vary significantly between Mexico and the United States. In the U.S., monthly triple net rent averages can exceed $1.18/sf/month in key logistics markets such as the Northeast (CBRE, Q1 2025), while more cost-effective areas like Charlotte average around $0.82/sf/month (CBRE, Q1 2025).
By comparison, industrial rents in many parts of Mexico remain well below these figures, often delivering savings of 20–50% for manufacturers. Below is a breakdown of average rents by city, along with current vacancy rates and percentage savings compared to the $1.00/sf/month U.S. benchmark.
| City | Average Rent | Vacancy Rate | Savings vs. U.S. ($1.00) |
|---|---|---|---|
| Tijuana | $0.79 | 2.73% | 21% |
| Saltillo | $0.66 | 0.67% | 34% |
| Monterrey | $0.65 | 2.73% | 35% |
| Hermosillo | $0.61 | NA | 39% |
| Mazatlán | $0.60 | NA | 40% |
Mexico rates courtesy of Citius Capital. U.S. benchmark derived from CBRE (Northeast) and CBRE (Charlotte) MarketFlash reports.
6. Will I have access to reliable utilities?
Utility costs in Mexico have tended to be similar to costs manufacturers will find in the United States. A more pressing concern may be whether your targeted location has reliable access to necessary utilities. This tends to be more of an issue for greenfield construction. In fact, reliable access to power, natural gas, and water infrastructure is a leading reason companies decide to operate within Manufacturing Communities in Mexico.
7. Will I have easy access to freight carriers?
From trucking companies and railway operators to third-party logistics providers, major logistics and shipping companies are investing heavily in Mexico in order to ensure adequate support for growing cross-border trade. That said, few carriers offer the capacity or visibility into shipping that may be available from U.S. freighters. An experienced shelter provider should be able to connect you with reliable freight carriers who offer intermodal services that meet your transportation needs.
8. Do I have redundant shipping options?
Mexico has an advantage over virtually every other low-cost manufacturing location due to its proximity to the world’s largest consumer market, The United States. Manufacturers in Mexico can maximize this advantage by considering locations with redundant shipping options. Some locations offer access to international highways, railways, airports, and deep-sea ports, ensuring products get to market when they’re expected.
9. Are there other suppliers in my sector located nearby?
When evaluating sites in Mexico, manufacturers tend to focus on locations near partners or other companies meeting similar market needs. In this way, companies can benefit from shared resources, such as material suppliers, training institutes, and trade association support. This strategic collaboration can help companies increase efficiency and lower costs. Companies may find this can benefit from this economy of scale by locating in a Manufacturing Community where resources are shared to the cost advantage of all.
10. Are there shelter service providers in the area?
Shelter service providers are a major competitive advantage for companies looking to quickly and cost-effectively ramp up manufacturing in Mexico. As the legal entity of record in Mexico, the shelter service provider takes on the regulatory red tape associated and much of the administrative burden associated with launching a company. A shelter company that knows your target area can also be a tremendous asset in recruiting a workforce, overseeing HR tasks, managing import and export administration, and ensuring compliance with Mexico’s regulations.
Read more: Why Shelter Services in Mexico Aren’t All Created Equal
11. What is the quality of life in the area?
Manufacturers are likely not looking just at a place to work, but also a place where members of their team may visit frequently or even relocate. That’s what makes quality of life such an important consideration in the site selection process. You’ll want to evaluate factors such as access to quality housing, healthcare, educational institutions, and recreational facilities.
How Mazatlán Compares
Mazatlán has long flown under the radar, but today, it’s one of the most compelling emerging locations for companies looking to manufacture in Mexico.A growing and youthful workforce is creating a stable pipeline of talent, while wage levels remain highly competitive compared to more saturated northern markets. For companies looking to balance cost efficiency with long-term scalability, Mazatlán is becoming an increasingly smart choice.
Tetakawi’s Mazatlán Manufacturing Community brings together the key ingredients for success in one turnkey location: Class A industrial real estate, on-site support services, and a platform designed to help manufacturers ramp up faster with less risk.
Want to learn more about how Mazatlán compares—or whether it’s the right fit for your strategy? We’re here to help you evaluate your options and plan your next move.
Read more: Why Tetakawi Chose Mazatlán—And Why You Should Too
