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After a decade of slow growth, averaging 1.3% per year, Mexico’s agriculture sector made a comeback in 2014, outperforming the wider economy and highlighting the sector’s counter-cyclical nature. Buoyed by favourable climatic conditions, the sector ended 2014 posting growth of 2.8%, with total production reaching a value of $53.3bn, according to the National Institute of Statistics and Geography. Meanwhile, total agro-food exports (including agro-industrial goods) reached a record $25.6bn in 2014. While the sector’s performance continues to suffer from a number of structural inefficiencies, particularly in relation to the ongoing prevalence of small farmers and the slow adoption of technology, measures to incentivise production and increase access to financing among small producers should see the sector continue on its path to recovery. This chapter includes interviews with Ricardo Aguilar Castillo, Under-Secretary of Food and Competitiveness, Ministry of Agriculture, Livestock and Rural Development, Fisheries and Food (SAGARPA) and Javier Valdes, Managing Director, Syngenta Mexico.

Two straight years of record growth in Mexico’s tourism sector have solidified its importance as a motor for economic growth. Tourism contributes over 8.7% to Mexico’s GDP, employs 3.6m people directly and is the fourth most important source of foreign currency. The sector exceeded growth expectations for 2014, registering a record number of international tourist arrivals, at nearly 29.3m, and generating revenues of nearly $16.2bn, enabling the country to reclaim its spot among the top 10 tourist destinations in the world, according to the UN World Tourism Organisation. The outlook for the industry is particularly positive. Rising demand for accommodation is driving growth in the hotel market and raising investor interest, while government efforts to boost the competitiveness of tourist destinations and increase promotional efforts should see greater diversification of both the tourist offering and source markets in the coming years. This chapter features an interview with José Luis Castro, CEO, CTS (Corporate Travel Services).

With a more robust government strategy to support research initiatives and a private sector attuned to the benefits of investing in new product development, innovation is slowly becoming instrumental to Mexico’s economic growth. Since taking office in December 2012, the government of President Enrique Peña Nieto has taken steps to improve the environment for research and innovation in the country. Among the recent measures introduced was the establishment of a high-level advisory committee to support the science and research sector, and the creation of a National Entrepreneur’s Institute to improve the environment for business creation. With the government aiming to increase expenditure on research and experimental development from 0.4% of GDP in 2013 to about 1% of GDP by the time the current presidential term ends in 2018, the research and innovation field could be set to enter a new phase of development in Mexico. This chapter features an interview with Enrique Cabrero, Director-General, National Council of Science and Technology (CONACYT).

As the recent constitutional reforms start to have an impact on the Mexican economy, construction activity is poised to grow. Total investment in the construction sector reached $148bn in 2014, according to the Mexican Chamber of Construction, of which 75% was accounted for by private investment. Though construction continues to be a volatile activity, the sector remains a key component of the Mexican economy, accounting for 8.1% of GDP in 2014. Meanwhile, a growing population and urban development in key cities across the country has put housing development at the forefront of government policy. The 2013 housing crisis, which saw the collapse of three of the biggest homebuilders in Mexico, has seen the government rethink subsidy allocation and other incentives, a move set to help revive the housing sector and reduce the country’s housing deficit, currently estimated at 15.3m homes. This chapter features an interview with Fernando González Olivieri, CEO, Cemex.

A significant component of the Mexican economy, the transport sector accounted for 6.4% of the country’s GDP and 5.3% of national employment in 2014, according to the Mexican Chamber for the Construction Industry. The country’s significant expansion of manufacturing in recent years is both benefitting the transport sector and placing it under increased pressure. Against this background, the current administration introduced a wide-ranging national infrastructure programme for 2014-18, allocating $39.2bn for the improvement of transportation links. Though declining oil prices since mid-2014 have negatively impacted the country’s budgetary position, leading the government to cut expenditure, no major cuts to large-scale transport infrastructure have taken place, aside from a small number of railway projects. Nonetheless, the current fiscal context may well lead to delays in project execution and will require the government to use the country’s evolving public-private partnership model to seek out increased private sector participation. This chapter features an interview with Norman Foster, Chairman and Founder, Foster + Partners.

With the initial signs of effective reform now reaching the market, Mexico’s telecommunications and IT sector is seeing the competitive progress that had eluded it for several years. Although long-time dominant player América Móvil remains the undisputed industry leader, the asymmetric laws introduced by the government are slowly opening the market to more effective competition. This is galvanising market players and reducing prices for consumers, as well as spurring interest among foreign investors. Prices for mobile telecoms fell by 17% between February 2013 and January 2015, according to the Federal Institute for Telecommunications, while prices for global telecoms services fell 15% over the same period. However, market shares for América Móvil have remained fairly steady, particularly in mobile, a trend expected to change in 2016 once competitors are granted access to América Móvil’s wholesale services and infrastructure to complement their own facilities.