Mexico’s Regional Divide: Hard Data Exposes Winners and Losers in Competitiveness

Mexico’s 2025 State Competitiveness Index, published by the Mexican Institute for Competitiveness (IMCO), exposes a stark divide between regions that attract investment and those that lag behind.

The report, based on 53 indicators across six categories, shows that Mexico City, Baja California Sur, and Nuevo León lead the nation in competitiveness.

These states benefit from diversified economies, robust infrastructure, and strong labor markets. They attract both domestic and foreign capital, and their ability to retain talent stands out.

Mexico City continues to dominate, serving as the country’s administrative and financial center. It offers the highest average monthly salary and leads in banking infrastructure.

Baja California Sur’s economy thrives on tourism, while Nuevo León’s industrial base continues to expand. These states also benefit from higher levels of innovation, with Mexico City and Jalisco leading in patent registrations.

However, the Index also highlights serious weaknesses in the south and some central regions. States like Chiapas, Guerrero, Oaxaca, and Michoacán show persistent gaps in education, health, and infrastructure.

Chiapas, for example, has the lowest average monthly salary and the fewest hospital beds per capita. These states also face high rates of informal employment, with informality reaching up to 78% in some areas.

The federal government’s Plan Mexico, launched in January 2025, aims to address these disparities. The plan focuses on industrial development, infrastructure expansion, and workforce training.

It targets a 28% investment-to-GDP ratio by 2030, with special tax incentives and public-private partnerships to stimulate growth. The strategy prioritizes key sectors like automotive, aerospace, energy, and semiconductors.

The government expects to create 1.5 million new jobs in specialized manufacturing and strategic industries. Plan Mexico also seeks to modernize trade corridors and improve logistics, especially in regions with high export potential.

For example, the northern states, including Baja California and Nuevo León, already show high export participation and economic complexity. Yet, these regions still face challenges such as crime and gender gaps in informal employment.

The Index and Plan Mexico both stress the need for tailored policies. Uniform solutions will not work for a country with such diverse regional strengths and weaknesses.

IMCO recommends that states invest in innovation, digital transformation, and logistics infrastructure. It also urges improvements in regulatory efficiency and legal certainty to attract and retain investors.

Political risk remains a concern. Analysts warn that centralization of power and weak oversight could undermine long-term competitiveness. While public optimism remains high, unchecked executive power could lead to arbitrary decisions that hurt the business environment.

Mexico’s competitiveness story is not just about rankings. It is about whether the country can close the gap between its most dynamic and its most vulnerable regions. The answer will shape Mexico’s future as a manufacturing hub and investment destination.