Mexico is a country rich in resources and potential. Among its notable industries are technology, oil production, brewing, automotive, mineral exploitation, tourism and manufacturing. In recent years, globalization has led to a growth in Mexico’s service sector.
The service sector, also known as the tertiary sector, includes activities related to services of non-production or transformation of material goods. Those in the service sector provide the necessary services to satisfy the needs of companies and other people. Some of the essential activities in this sector include trade, finance, transport, communications, tourism, health and education.
An Overview of the Service Sector in Mexico
During the 20th century, Mexico's economy went from being an agrarian economy to an industrial economy. In the 1960s, manufacturing was the main driver of the country's economy. However, over the years, the service sector gradually became more relevant, turning into the most important sector in Mexico's economy.
In 1982, the globalization process began, and companies started looking for workers to generate a more competitive market among businesses, taking advantage of the information technologies present at the time. In 2001, Mexico surpassed Brazil as the country with the most extensive service sector in Latin America.
By the end of 2016, the service sector had grown considerably, representing 63.4% of the Mexican economy, with 33.4% in the industrial sector and 3.2% in agriculture. In 2019, the service sector employed approximately 61% of the nation's workers and contributed significantly at 63% of the GDP.
The high-tech, information and software development sectors have experienced steady growth, driven by the quality of the workforce and the low cost of call centers.
On the other hand, medical services and tourism have also experienced remarkable growth due to the low costs of their services compared to other Western countries. According to the Secretariat of Tourism, Mexico had about 41.4 million visitors in 2018, the highest number recorded in the history of the country.
Within the service sector, the sub-sectors with an enormous contribution to the Gross Domestic Product (GDP) are (according to the Secretary of State for Trade of Mexico 2019): Trade (18.9), real estate and rental services (9.7), tourism (8.9), transport, post and storage (6.1), financial and insurance services (4), legislatives, governmental, justice, international and extraterritorial activities (3.8), educational services (3.7).
Trade is undoubtedly the greatest contribution to the tertiary sector, and this is due to the increase in department stores and chains that have taken place in the country. It is estimated that supermarkets, discount stores, department stores and shopping centers generate approximately one-fifth of the market, while small family businesses make up 50% of sales. On the other hand, the financial sector is one of the industries that has generated the most economic investments in Mexico.
Tourism should be highlighted, which has grown in recent years. Mexico is a country with enormous tourism potential due to its natural and cultural attractions. According to the World Tourism Organization (UNWTO), Mexico is the 6th most visited country in the world. Tourism is one of the industries with the most foreign and national investment as well.
The Mexican economy has advanced considerably in recent years thanks to globalization, showing characteristics more in line with a developed economy than one that is still developing. This growth can be seen in the service sector, where trade, financial activities and tourism stand out.
For more information about the service sector in Mexico, as well as export financing solutions, please contact RTS International.