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2012: Baja California Regional Economic & Tourism Trends
The document discusses the economic and tourism trends in Baja California, highlighting a slight rebound in both border crossings and hotel occupancy in early 2012. The maquiladora/IMMEX industry is showing signs of recovery, with a positive outlook for manufacturing employment, particularly in the medical device sector. Overall, while challenges remain due to the slow US economic recovery, the long-term prospects for the region appear optimistic.
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2012: Baja California Regional Economic & Tourism Trends
- 1. Baja California Economic& Tourism Trends 2012CrossBorderWorldClassLeadershipConference Rosarito,Baja California
- 2. • Background • RegionalTourism • Regional Economy • Summing it Up OVERVIEW
- 3. • Kenn Morris •Founder & President/CEO of Crossborder Group Inc. • Gerente General de Crossborder NS, S de RL de CV • Nearly 20 years of business consulting, market research and policy research in Mexico, the US- Mexico border region, and Central America • Former Director of “Crossborder Innovation & Competitiveness Initiative” at UCSD San Diego Dialogue • In 2008, appointed by Secretary of Commerce as founding member of US-Mexico Border District Export Council QUIEN SOY? WHO AM I?
- 4. • Founded in1996 in San Diego • Crossborder Group Inc. (1996, US) • Crossborder NS, S de RL de CV (2007, Mexico) • Currently with bilingual staff in two offices • San Diego • Leader in US-Mexico market research and strategic consulting • Specializing in: • Industry research and market entry strategies • Facility siting studies and economic models • Surveys, focus groups, and executive interviews • NAFTA/CAFTA business opportunties • Crossborder strategies & communications CROSSBORDER’S BACKGROUND • Tijuana
- 5. A FEW OFCROSSBORDER’S CLIENTS …and many others – ranging from major corporations, to government agencies, to NGOs, to small start-ups…
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- 7. CARGO & CARCROSSINGS AT BORDERS: BIG PICTURE Borderwide, big picture shows some signs of improvements… …but after many years of steep drop-offs in both cargo and passenger vehicle crossings
- 8. Regional Border Crossings:+up… • 10.4 million border crossers in Q1-2012 at SD-Baja POEs • San Ysidro + Otay + Tecate • Individuals: pedestrians, car passengers, bus passengers • Up only slightly from 2011 (.2%), but up 5.1% from 2010 low… • Crossborder expects 2012 to finish up by 1-2% over 2011… • …challenged by construction at SY POE & border crossing delays REGIONAL BORDER CROSSINGS: Q1-2012
- 9. Monthly hotel occupancydata (SECTUR) appearing to show some increases in occupancy levels… …however, majority appears to be of domestic (MX) visitors still, but with some increases in SoCal residents (need to do more) HOTEL OCCUPANCY
- 10. Good news: definiterebound in cruise ship passengers to Ensenada (much better than many other cruise ship destinations on MX West Coast) • Q1-2012: 117K passengers • 7.5% increase over Q1-2011 • More binational coordination and investment needed… • …particularly as wine region becomes better known, great opportunities to upgrade regional attractions CRUISE SHIP PASSENGERS
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- 12. • In US$,manufacturing costs… • US has increased +36% • Canada increased +58% • In 10 years (2000-2009), Mexico has remained approximately $5/hr • 2002-2008: USDOL estimated mfg labor costs in China increased from US$.58 to US$1.36 • Since 2008…have gone even higher • Yuan has strengthened, US$ has weakened • General manufacturing labor & shipping costs have increased • 5 years: some parity MX vs China BIG PICTURE: MFG COST TRENDS FAVOR MEXICO
- 13. • Looking atwide range of facility operating variables, as well as taxation, KPMG identified Mexico as the lowest-cost manufacturing country amongst 14 major countries studied… • 21%+ lower cost than similar mfg operation in US • Only a 5%-higher cost that similar operation in China…showing shrinking advantage COMPETITIVE COMPARISON: KPMG COMPETITIVE ALTERNATIVES
- 14. Economic revival & competitiveadvantage leading to recovery in National-level maquiladora/IMMEX employment… • National: 1.9M (similar to 2007) • Baja: 222K (vs. 260K in 2007) • Tijuana: 146K (vs. 170K in 2007) • Heavy loss in electronics … MAQUILADORA/IMMEX INDUSTRY TRENDS
- 15. Crossborder Group surveyof HR staff from Tijuana-based technology manufacturers in Q2-2012 (91 companies) • Question: “In the next 6 months, do you estimate your employment will increase, stay the same, or decrease?” • While majority indicate: “stay same”… • Very few: “decline” • Over one-third: “increase” MANUFACTURING EMPLOYMENT OUTLOOK: 2-H 2012
- 16. • …In fact,medical device industry continues to grow • Tijuana still North American leader in medical device manufacturing employment with 31,000+ employees (based on our 2012 surveys) IN FACT, REGIONAL ADVANTAGE FOR MEDICAL DEVICES
- 17. • Tourism andoverall economy still weighed down by slow US economic recovery… • …but some signs of revival in both tourism sector… • …and manufacturing industries in region • Long term outlook (2012 and beyond) very positive • More outreach and education needed • Positive news about security improvements and strategic advantages need to be amplified • Likely to see more obvious recovery in 2013 SUMMING IT UP…
- 18. Gracias! Contact Us atwww.CrossborderBusiness.com 1-888-4XBORDER or 619-710-8120