Maquiladora Prospects in a Global Environment

The Mexican in-bond assembly, or maquiladora, manufacturing sector has taken its fair share of lumps in recent years. The industry has experienced a business cycle downturn in the U.S., intermittent border closures, higher tax burdens, fiscal uncertainty, competition from offshore assembly plants in China, and national legislative gridlock. Nevertheless, with double-digit rates of expansion less likely to occur, overall prospects for maquiladora operations remain generally favorable but far from optimal.