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Executives optimistic about expanding to Mexico

There is an executive smiling as his coworkers stand and smile behind him.
20 Aug 2013

As the U.S. economy and foreign markets improve, U.S. manufacturers are becoming more confident about their offshoring efforts. According to the 2013 CFO Outlook Mid-Year Update by the Bank of America Merrill Lynch, recent economic boosts in the U.S. and Mexico have caused more U.S. businesses to consider expanding to Mexico. With Mexico's government currently considering energy reforms and the competitive manufacturing environment in the country, U.S. businesses can take advantage of Mexico's low-cost manufacturing and improving economy through offshoring their operations to the country.

According to the survey, CFOs gave the global economy a score of 51 out of 100, up from 2012's score of 45, with the U.S. economy receiving a score of 58 out of 100. The survey polled 250 CFOs and company executives and was conducted by Granite Research Consulting.

The recent improvements to the U.S. and global economies have caused many U.S. businesses to become optimistic about their expansion efforts and increasing their share of the market. In fact, 84 percent of survey participants said their organization had operations in Mexico, with another 27 percent reporting they plan to expand to the country in the near future. This rise in confidence shows the majority of U.S. businesses place value in becoming active in foreign economies and markets.

Stephen Tremblay, vice president and chief financial officer at Kraton Performance Polymers, said his company has been able to improve its bottom line by offshoring its operations, receiving additional flexibility and financial growth in the process.

"With manufacturing plants in five countries and a diverse group of customers around the globe, our company needs to have access to capital in multiple markets," Tremblay said. "Considering that high level of international activity, we value being able to increase our financial flexibility while lowering our cost of capital."

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