Nicaragua will lead the manufacture industry in the short term

February 26, 2015

Did you know that Nicaragua manufactures parts for the most important automobile companies in the world? Yazaki (the largest producer of automotive harnesses in the world) and Dräxlmaier (a German automotive corporation) are manufacturing in the country for brands such as Ford, Chrysler, GMC, BMW and Volkswagen.

According to Stratfor, geopolitical intelligence and advisory firm from the United States, Nicaragua will lead the manufacturing industry in the short term. This is not far from the truth: Nicaragua has a strategic location and, therefore, preferential market access to the world´s most important markets. Also, the country has a pro investment government, a competitive cost structure, a qualified labor force and a series of fiscal incentives that have boosted investment in the country.

A recent study published in 2014 by Arc Consulting Group and Siemens titled ‘The Future of Manufacturing: Scenarios for Investment in Manufacturing through 2050’’ the industry will grow though 2050. According to the study, the economies that will lead the industry are China, Russia, Turkey, South Africa, Indonesia and the Latin American countries. The study concludes that the growth of the sector will remain stable during this period, and the afore mentioned economies will experience the highest growth.

The perspectives forecasted for Latin American countries are really good, especially for Nicaragua, where the manufacture industry has experienced a boom in the last decade. Nicaragua’s auto parts exports to the third trimester of 2014, accounted for 24.9 percent of the country free trade zones exports and 11.45 percent of its total exports. Nicaragua also manufactures footwear and apparel.

Nicaragua seems to be heading in the right direction. The country has demonstrated that its workforce has a rapid learning curve, which has contributed to the growth of companies' exports. Nowadays, the country is trying to add value to the products manufactured in Nicaragua as to diversify and specialize the industry. These new processes will definitely improve the manufacturing industry.

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En español: Nicaragua liderará la industria de manufactura a corto plazo