German companies perceive greater insecurity in Mexico, survey says


In the midst of the uncertainty and economic crisis, the intention of the German business sector to invest in Mexico stood out during the first months of 2022, however, they observe with concern the economic policy headed by President Andrés Manuel López Obrador, as well as the increase in crime and violence across Mexican territory.

According to the spring survey “World Business Outlook” carried out by the Association of German Chambers of Industry and Commerce (DIHK), 9 out of 10 businessmen say that insecurity in Mexico is the same or worse than in the last six months and this affects business development.

Faced with the worsening of violence, German businessmen added the variable of insecurity to the survey to assess the impact on their businesses, after “55% of businessmen have observed a deterioration in the security situation in recent years, while the rest consider that it remains the same compared to the fall of 2021”, said Johannes Hauser, general director of the Mexican-German Chamber of Commerce and Industry (Camexa).

When asked about how crime and/or violence in the country has affected their business in the last 6 months, 39% responded that they perceive a greater impact, since the security situation has deteriorated and 16% stated that have had a much greater impact. While 37% considered that the security situation has not changed.

The Camexa has 750 member companies, including Volkswagen, Audi, Bosch, and BMW, from the automotive industry, as well as pharmaceuticals, agri-food, and international airlines such as Lufthansa, among others.

Volkswagen Tiguan cars are pictured in a production line at company’s assembly plant in Puebla, Mexico, July 10, 2019. Picture taken on July 10, 2019. REUTERS/Imelda Medina – RC11796D4070

The director of the Mexican-German organization mentioned that optimism regarding the development of the company’s own business is even greater with respect to the country’s economy as a whole, 51% against 19 percent.

Most German businessmen and women surveyed consider that the economic policy dictated by the current government is another of the greatest risks in the economic development of their companies in the next twelve months, 60% of those surveyed observe this with concern, compared to 53% who responded during the fall of 2021.

Among the main problems observed in the short term due to the situation in Ukraine and Russia are interruptions in the supply and logistics chain (with 61%); higher costs for energy, raw materials, and groundwork (58%); lack of raw materials and inputs (52%); production stoppage and reduced production.

Despite the situation, optimism is still manifested in investment intentions.

Source: El Economista

Mexico Daily Post